Big-box retailer Walmart has entered discussions to invest roughly $7bn in India-based e-commerce company Flipkart at a valuation of about $20bn, Bloomberg reported today, citing people familiar with the matter.
Flipkart runs an e-commerce marketplace with more than 100 million registered users and some 80 million products spanning areas such as electronics, clothing, sporting equipment, furniture and household goods.
The deal would involve Walmart buying shares from telecommunications and internet group SoftBank and hedge fund manager Tiger Global Management, though it is unclear whether any new shares would be issued as part of the transaction.
SoftBank’s Vision Fund invested $2.5bn in Flipkart in an August 2017 deal that included primary and secondary share purchases, valuing the company at $12.5bn.
Vision Fund’s investment followed $4.7bn of funding, $1.4bn of which came from e-commerce firm eBay, internet group Tencent, software provider Microsoft and media and e-commerce group Naspers in April 2017. Naspers owned a 16.5% stake in Flipkart as of June the same year.
Other past Flipkart investors include media company Bennett, Coleman & Co, 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.
The talks are at a critical stage and the transaction could close this month, the sources said. The prospective deal would make Walmart the company’s largest shareholder and would play a significant part in the expansion of its e-commerce business, which has been buoyed by purchases of companies such as Jet and Bonobos.
The funding could also help Flipkart fend off a challenge from US-based e-commerce firm and Walmart rival Amazon, which has pledged to invest $5bn in its Indian operations.