Fintech & Ecommerce

Walmart Buys Out Tiger Global’s Flipkart Stake

Walmart bought out Tiger Global Management’s remaining stake in Flipkart, an Indian e-commerce company, for $1.4 billion.

Walmart Buys Out Tiger Global’s Flipkart Stake

As a result of the implementation of this transaction, the American retail corporation has increased its bet on the Indian firm with which partnerships were previously established. In May 2018, Walmart acquired a 77% stake in Flipkart. This deal worth $16 billion was the largest in the history of an American corporation. Investors reacted negatively to this action by Walmart. They questioned the prospects of the corporation’s activities in the Indian market. Amid a reaction that did not contain enthusiasm for the deal, the value of Walmart shares decreased by 3.1%.

The corporation’s purchase of a Tiger Global Management stake helps the money manager distribute funds to investors, which is of particular importance during a period of difficult access to liquidity.

After the deal was implemented, the value of the Indian e-commerce giant was fixed at $35 billion. The relevant information is contained in a letter that Tiger Global sent to investors. The current level of the company’s value is lower than the same indicator, which was recorded in 2021 and amounted to almost $38 billion. This value of the firm was achieved during the financing round.

There have been no official comments on the deal from the participants in this process so far. The media reported about the buyout of Tiger Global Management’s stake.

Separately, the venture capital company Accel sold its 1% stake in Flipkart to Walmart. This information was also reported by the media.

Tiger Global initially invested $8.6 million in the Series B round of Flipkart in 2009. Then the cost of the current giant of Indian e-commerce was $42 million. Between 2010 and 2015, Tiger Global invested another $1.2 billion in Flipkart. These funds were channeled through venture capital investment partners and a hedge fund.

In 2017, Tiger Global sold part of its stake in Flipkart to SoftBank Group, and a year later sold an even larger part of Walmart’s ownership. The company’s investment in the Indian e-commerce giant helped generate a profit of $3.5 billion. The firm promised to provide detailed information about its actions related to Flipkart in the coming weeks.

Walmart is currently actively engaged in the implementation of its intentions to scale activities in the Indian market, which demonstrates the dynamics of growth. The current trends in the development of India’s consumer sector signal long-term prospects for a positive upward movement. This year, the company launched an online retail application in this country. This application can be used by stores and smaller sellers.

As we have reported earlier, Walmart Opens Second Automated Market Fulfillment Center.