NEW DELHI: Walmart has spent $3.5 billion this year to increase its stake in Indian business Flipkart to 80.5%, underlining the aggressive bets the United States-based retailer is making in the country, which it counts as one of its key markets.
In July, some of Flipkart’s early investors including Tiger Global, Accel and co-founder Binny Bansal fully exited the company by selling their stakes to Walmart. While Tiger Global held about 4.1%, Accel and Binny Bansal held about 1.1% and 1.8% stake in Flipkart at the time of the transaction, data sourced from market research firm Tracxn showed.
Some portions of the amount were also used to settle liabilities with certain PhonePe shareholders, Walmart said in its filing made with the US Securities and Exchange Commission.
“During the six months ended July 31, 2023, the company paid $3.5 billion to acquire shares from certain Flipkart non-controlling interest holders and settle the liability to former non-controlling interest holders of PhonePe,” Walmart said in the filing.
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Based on Tiger Global’s acquisition value, Flipkart was valued at around $35 billion. In 2021, Walmart had also co-led a $3.6 billion funding in Flipkart along with few other investors at a valuation of $37.6 billion.
Walmart which competes with global and local behemoths like Amazon, Reliance and Tata in the Indian e-commerce space has been deeply invested in the market and aims to take Flipkart, public in the coming years.
In a recent interview, Judith McKenna, outgoing president & CEO at Walmart International had said that the Flipkart business continues to deliver and is a strong competitor in the India market.
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“Flipkart’s ability to move with speed and to innovate is hard to replicate around the world. We have a business in Africa called Massmart, and we have asked them to be the partners and actually build the marketplace there,” McKenna had told TOI, adding that the India opportunity is big.
Walmart acquired a 77% controlling stake in Flipkart, co-founded by IIT graduates Sachin Bansal and Binny Bansal in a $16 billion deal in 2018.
The deal had then valued Flipkart at $21 billion. As part of the transaction, co-founder Sachin Bansal had exited the company and sold his entire 5.5% stake to Walmart for about $1 billion.
