Key Takeaways
- Walmart purchased Tiger Global’s investment in Flipkart for a sum of $1.4 billion, valuing the e-commerce giant at $35 billion.
- This valuation reflects a slight dip from the previous valuation of $38 billion after Flipkart sold shares to various investors in 2021.
- Between 2010 and 2015, Tiger Global invested nearly $1.2 billion in Flipkart and has seen gains amounting to $3.5 billion.
- In 2018, Walmart bought a majority 77% stake in Flipkart for about $16 billion and has voiced intentions to take the company public in the near future.
- Walmart’s CFO, John David Rainey, has stated that Flipkart has the potential to become a $100 billion enterprise, contributing significantly to Walmart’s goal of doubling its foreign gross merchandise volume to $200 billion within five years.
US retailer giant Walmart has reportedly bought out hedge fund Tiger Global’s stake in Indian e-commerce colossus, Flipkart, for $1.4 billion, according to a letter by the hedge fund to its investors.
This transaction has adjusted Flipkart’s valuation to $35 billion, a marginal dip from $38 billion after the firm sold its shares to investors such as Japan’s SoftBank, Walmart, and others in 2021. Tiger Global, which held about 4% of Flipkart according to a report by Economic Times, has had a long and fruitful history with Flipkart. It invested nearly $1.2 billion in the company between 2010 and 2015, yielding $3.5 billion in gains as per the investor letter.
The relationship between Walmart and Flipkart began in earnest in 2018 when Walmart acquired a 77% stake in Flipkart for about $16 billion, marking the retailer’s largest acquisition. The company expressed intentions later that year to take Flipkart public within four years.
Speaking at a recent investor conference, Walmart’s Chief Financial Officer, John David Rainey, expressed high hopes for Flipkart. He outlined a vision for the company as a potential $100 billion enterprise, fueled by its robust growth. Rainey emphasized the crucial role of Flipkart, along with the PhonePe payments business, in achieving Walmart’s ambitious goal of doubling its gross merchandise volume in foreign markets to $200 billion within the next five years.
While Walmart, Flipkart, and Tiger Global did not immediately respond to requests for comment on this recent transaction, the move reflects the ongoing consolidation and high-stakes investment activity in the world of global e-commerce.
The latest development comes after reports surfaced earlier this year that private equity firms, Accel and Tiger Global, two early backers of Flipkart, were considering selling their remaining stake in the company to Walmart. The two investors held a collective 5% stake in Flipkart, and there were talks of selling their stake for $1.5 Bn each, adding another exciting twist to this unfolding saga in the e-commerce landscape.
With this acquisition, Walmart continues to bolster its footprint in the global e-commerce market, leveraging Flipkart’s expansive market reach and potential to boost its growth plans.
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