Retail group Walmart closed its $16bn acquisition of a 77% stake in India-based online marketplace Flipkart on Saturday, enabling telecommunications firm SoftBank and e-commerce company eBay to exit.
The deal, initially announced in May this year, values Flipkart at approximately $20.8bn, and the stake purchase was made alongside the provision of $2bn of equity funding for the company.
Flipkart runs an e-commerce platform that lists more than 80 million products across about 80 categories including electronics, appliances, clothing and home goods. It also owns fashion e-commerce subsidiaries Myntra and Jabong as well as payment app PhonePe.
Although some of its investors, including SoftBank and eBay, are exiting entirely through the deal, internet group Tencent, software provider Microsoft and investment firm Tiger Global Management will retain stakes. Tencent and Tiger Global will also keep their board seats.
Flipkart had raised $7.2bn in funding prior to the acquisition, most recently securing $2.5bn from SoftBank’s Vision Fund in August 2017 at a $12.5bn post-money valuation. Vision Fund will get a return of just over $4bn for its investment.
Tencent, Microsoft eBay and e-commerce and media group Naspers had supplied $1.4bn in funding for the company four months before at an $11.6bn valuation. Naspers, which had been a Flipkart backer since 2012, reportedly held a 16% stake and made about $3.3bn in the sale.
Flipkart’s existing investors also include media group Bennett, Coleman & Co, Morgan Stanley Investment Management, Qatar Investment Authority, GIC, Iconiq Capital, Accel, Baillie Gifford, Greenoaks Capital, IDG Ventures India, Steadview Capital, DST Global, Sofina and T. Rowe Price.
Binny Bansal, co-founder and chief executive of Flipkart, said: “We are poised and ready to deliver the full value of this partnership for India.
“By combining Walmart’s omni-channel retail expertise, supply-chain knowledge and financial strength with Flipkart’s talent, technology and local insights, we are confident that together we can drive the next wave of retail in India.”