On Monday, media reports indicated that Walmart (WMT.N) has increased its control over the Indian e-commerce company Flipkart by acquiring the remaining stakes held by hedge fund Tiger Global and venture capital firm Accel.
According to the Wall Street Journal, Walmart paid $1.4 billion to purchase the remaining Flipkart shares owned by Tiger Global, resulting in a valuation of approximately $35 billion for the Indian company. This valuation is lower than the nearly $38 billion valuation Flipkart achieved in 2021.
A Walmart spokesperson confirmed the acquisition to Reuters, stating that the company bought additional Flipkart shares from some investors, including Tiger Global. However, specific financial details were not disclosed.
Back in 2018, Walmart made its largest investment by acquiring a 77% stake in Flipkart for around $16 billion. It remains unclear what Walmart’s stake in Flipkart is following this latest purchase.
Flipkart has experienced significant growth and emerged as one of India’s prominent online marketplaces, with a particular focus on serving small towns and cities, setting it apart from its urban-oriented competitor, Amazon. Similar to Amazon, Flipkart began its journey by selling books but swiftly diversified into offering various products such as consumer electronics, fashion, groceries, and home essentials. Additionally, it provides services like travel booking and online prescriptions, capitalizing on India’s rapid adoption of smartphones and affordable mobile data.
Walmart mentioned that in the most recent quarter ending on April 30, Flipkart demonstrated double-digit sales growth, boosted by new shoppers in certain cities and a notable 50% increase in advertising sales.
More recently, company executives have highlighted Flipkart as a crucial driver in Walmart’s ambitious goal of doubling the gross merchandise volume it sells in foreign markets to $200 billion within five years.
In a statement, Walmart expressed its confidence in Flipkart’s future, affirming a positive outlook on the opportunities in India today compared to when their initial investment was made.
The sale of Accel’s stake in Flipkart was reported by the Economic Times newspaper, but the exact amount paid by Walmart was not specified. Neither Accel nor Tiger Global responded immediately to requests for comment.
The reporting for this news came from Yana Gaur and Urvi Dagar in Bengaluru and Siddharth Cavale in New York. Additional contributions were made by Bharat Govind Gautam and Rishabh Jaiswal. The editing was handled by Kim Coghill, Chris Reese, and Nivedita Bhattacharjee, with Kevin Liffey overseeing the final edit.
