PE: Walmart buys $1.4 Billion Tiger Global stake in Flipkart
Transaction:
- Tiger Global and Accel sold a remaining 5% stake in Flipkart to Walmart, as reported by various media outlets.
- Flipkart was reportedly valued at $38 billion in the latest transaction, higher than valuation of $35 billion in 2022 resulting into a highly profitable exit for both funds.
About Flipkart:
- Founded in October 2007, Flipkart, an Indian E-commerce company, was initially focused on online book sales with country-wide shipping and slowly grew in prominence.
- Flipkart has dominant position in apparel and mobile phone segments built by number of acquisitions like Myntra (US$280 Mn), PhonePe, Jabong (US$70 Mn), eBay.in, Arvind Youth Brands (US$35 million for 27% stake), Cleartrip etc.
About Tiger Global:
- Established in 2001, Tiger Global is an investment firm focused on public and private companies in the global Internet, software, consumer, and financial technology industries.
About Walmart Inc.:
- Established in 1962, Walmart Inc. is an American multinational retail giant that operates a chain of hypermarkets, discount department stores, and grocery stores in the US, headquartered in Bentonville, Arkansas.
- Walmart’s acquired Flipkart for $16 billion in 2018 for a 77% stake.
Rationale:
- Flipkart has raised a total of $14.3B in funding over 27 rounds. Their latest funding was raised on Jul 31, 2023 from a Secondary Market round.
- The total revenue in FY22 was Rs 43,357 Crore and the losses were reported to be Rs 2,445 Crore.
Tiger Global:
- Tiger Global was one of the key investors in Flipkart. It had initially invested $8.6 million during Series B round in 2009 at a valuation of $42 million. Between 2010 and 2015, Tiger global invested $1.2 billion, as reported by Bloomberg.
- Tiger Global sold part of its Flipkart stake to Softbank Group Corp in 2017 for approx. $1 Billion, followed by a nearly $2.5-billion sale to Walmart in 2018.
- Tiger reportedly made total gain of US$3.5 Billion over the years from Flipkart, highest it generated from a single company globally.
Accel:
- Flipkart completed its first funding round from Accel India receiving US$1 million in funding in 2009. Accel held over 20% stake when they first invested in 2008. However, they gradually reduced their stake to around 6% by 2019.
- Accel retained a small 1.1 percent stake after the acquisition by Walmart. Accel’s decision to exit has resulted in cumulative returns of an astonishing $1.5-2 billion, showcasing a remarkable 25-30X return on their total investment of approximately $60-80 million over the years.
Bansal’s:
While Sachin Bansal had already sold his stake to Walmart in 2018, Binny Bansal continued to hold around 2% in the company, which he has sold now.
Acknowledgements:
RBI Bulletin (www.bulletin.rbi.org.in), SEBI (www.sebi.gov.in), NSE (www.nseindia.com), BSE (www.bseindia.com)
Disclaimer:
This material has been prepared by the personnel in Vora Corporate Finance which is Investment Banking arm of Vora Management Consultancy Private Limited and looks after Mergers & Acquisitions (M&A), Private Equity (PE), Fund Raising, Debt syndication and Valuations and is based out of Ahmedabad, Gujarat, India. Any views or opinions expressed herein are solely that of individual authors and may differ from view of Vora Management Consultancy Private Limited. This material is proprietary to Vora Management Consultancy Private Limited and is for your personal use only. Any distribution, copy, reprints or forward to others is strictly prohibited.
This material captures the information based on information available in the public domain, public announcements and sources believed to be reliable. Analysis contained herein is based on publicly available information and appropriate assumptions. This material is intended merely to highlight market developments and is not intended to be comprehensive and does not constitute strategic, investment, legal or tax advice. In no event Vora Management Consultancy Private Limited be liable for any use by any party or for any decision made or action taken by any party in reliance upon, or for any inaccuracies or errors in, or omissions from, the information contained herein and such information may not be relied upon by you for evaluating any transaction.
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