Retail group Walmart is set to invest about $12bn in India-based e-commerce firm Flipkart in the next two weeks in return for a majority stake, Bloomberg reported yesterday.
All the major investors in the company have approved the deal according to people familiar with the matter, and SoftBank will sell a “substantial” part of its stake, sized at more than 20%, at the $20bn valuation at which Walmart will invest.
The company’s other large investor is hedge fund manager Tiger Global Management, who will divest almost all of its 20% stake. Walmart will come out with a share of Flipkart sized at between 60% and 80%.
Founded in 2007, Flipkart operates an e-commerce marketplace with a little more than 10 million monthly active users as of January this year that sells goods including electronics, appliances, fashion and household goods.
Walmart was effectively bidding against another US-based company, e-commerce firm Amazon, but Flipkart’s executives and shareholders chose Walmart partly because Amazon’s existing presence in the Indian market would have made regulatory approval trickier.
Flipkart has raised $7.2bn in funding, most recently securing $2.5bn from SoftBank’s Vision Fund in August 2017 at a $12.5bn valuation.
E-commerce firm eBay, internet group Tencent and software producer Microsoft had joined media and e-commerce company Naspers, an existing backer, to invest $1.4bn in the company four months earlier. Media group Bennett, Coleman & Co had supplied $39m in February 2018.
Flipkart’s earlier investors include 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.