Feb 8: Walmart, America’s multinational retail corporation, is looking for a larger stake in the domestic e-commerce company Flipkart. Around two years ago the global media had reported that Walmart was keen on acquiring minority stake in Flipkart. As per the recent reports, Walmart is aspiring to double the valuation of the Indian e-commerce company to nearly $20 billion by buying out its various early shareholders.
Japan’s SoftBank had last year infused $100 billion in the Bangalore based e-tailer via its Vision Fund. At present, Soft bank is the largest shareholder in Flipkart with 23.6% stake, followed by Tiger Global at 20.5 % and Naspers with 13%. Flipkart founders Binny and Sachin Bansal hold 10% in the company. Sources suggest that the global brick and mortar behemoth plans to invest around $10 billion.
After the $100 billion infusion from SoftBank, Flipkart had increased its cash reserves to over $4 billion. The Softbank investment added to the $1.4 billion that Flipkart raised earlier March this year from eBay, Microsoft and Tencent in this round of funding.
A deal of $1.1 billion was put forward to Snapdeal in 2017 by Flipkart. But the Snapdeal management expected Flipkart to add $150-200 million for the subsidiaries Vulcan and Unicommerce to the then valuation of $ 1.1 billion.
However, Snapdeal walked out of the deal after Flipkart came in with a revised offer of $950 million .
The recent Walmart move suggest that domestic e-commerce majors have come to accept that foreign investments are indispensable for growth in an increasingly competitive market, post-arrival of Amazon in India.