Retailer Walmart has entered discussions to acquire a stake of more than 40% in India-based e-commerce company Flipkart, Reuters reported today, citing two sources familiar with the matter.
Flipkart’s e-commerce marketplace lists more than 80 million consumer items across 80 categories including electronics, clothing, domestic appliances, jewellery and sporting equipment. It has some 100 million registered users.
Telecommunications and internet group SoftBank’s Vision Fund bought $2.5bn of primary and secondary Flipkart shares in August 2017 at a reported $12.5bn valuation, and Walmart’s offer would value the company even higher, the sources said.
Walmart has 21 cash-and-carry outlets in India but the Flipkart deal would give it a sizeable share of the country’s e-commerce market.
The firm has used strategic acquisitions, including the $3.3bn purchase of e-commerce platform Jet, to enhance its holdings in the US in the past two years as it looks to eat away at the significant lead Amazon has taken in the online retail space.
One of the sources told Reuters: “As large as they are, Amazon has eaten away a significant chunk of their revenues and I think…they view India as the largest market possibly for this (taking on Amazon).”
Flipkart had raised a total of $4.7bn prior to the SoftBank investment, including $1.4bn from internet group Tencent, media and e-commerce firm Naspers, e-commerce company eBay and software provider Microsoft in April 2017.
Media group Bennett, Coleman & Co had invested $39m in February 2017, and Flipkart’s other backers include Tiger Global Management, Steadview Capital, IDG Ventures India, Baillie Gifford, Greenoaks Capital, Qatar Investment Authority, GIC, Morgan Stanley Investment Management, DST Global, Sofina, Accel, Iconiq Capital and T. Rowe Price.