31 July 2023

Walmart buys more stake in India's Flipkart

Walmart has bought a 4% stake in e-commerce firm Flipkart from hedge fund Tiger Global in a deal worth $1.4 billion. In addition, Walmart also acquired a 1% stake from VC firm Accel.

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Flipkart is the only Indian startup in which Tiger Global has invested an amount in excess of USD 1 billion. Apart from this, it has invested a total of over USD 6 billion in Indian startups. In 2017, Tiger Global divested a part of its stake in Flipkart to SoftBank, followed by another sale to Walmart the following year. In total, its investment in Flipkart yielded an impressive profit of US$3.5 billion.

Founded in 2007, Flipkart is one of the largest e-commerce companies in India and boasts of a huge customer base of over 450 million customers. Through its online marketplace, it offers an extensive range of more than 150 million products in over 80 categories. India has become a key battleground for Walmart and Amazon, which, for example, have struggled to compete with local players such as Alibaba Group and JD.com in China. According to research firm Bernstein, e-commerce revenues in India are projected to triple between 2020 and 2025, reaching $135 billion.

In 2018, Walmart made a $16 billion investment in Flipkart for the first time, acquiring a 77% stake. Since last year, an analysis conducted by market research firm Tracxn revealed that Walmart's share has declined slightly to 72%. Its share is expected to return back to 77% once the deal is completed.