Balance $400 million to come from other investors; valuation at premium of 5-10%.
E-commerce major, Flipkart said on Thursday that its largest shareholder, Walmart will be investing $600 million into the company, as part of its $1 billion fund raise plan. Other internal stakeholders and a few external investors will be putting in the balance $400 million.
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Flipkart will use the money to expand its operations, strengthen its supply chain and bolster its tech capabilities. However, this is not a pre-IPO round and another fundraise can be expected next year.
Industry sources said that the ongoing round values Flipkart at a premium of around 5-10% from its previous valuation. Flipkart was last valued at around $35 billion.
Walmart’s stake in Flipkart crossed the 80% mark in July when the company bought the residual stake from some of the early investors – Tiger Global Management, Accel, and co-founder, Binny Bansal — in the e-commerce firm.
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Tiger Global had sold its remaining 4% stake to Walmart and had made gains of approximately $3.5 billion. Similarly, Accel which had retained a small 1.1% stake sold it off to Walmart, and generated cumulative returns of around $1.5-2 billion. Co-founer, Binny Bansal had also divested his remaining stake of 1-1.5% to Walmart, and had made about $1-1.5 billion from the sale.
These transactions had happened valuing Flipkart at $35 billion. Prior to acquiring the stakes from these three entities, Walmart’s stake in Flipkart was at 75%, which had crossed 80%. Walmart had acquired 77% stake in Flipkart in for $16 billion in May 2018 and later reduced it to 75%.
Accel, both India and US together held more than 20% in Flipkart initially when they backed the company in 2008, but gradually reduced their stake to about 6% before Walmart acquired a majority share in Flipkart in 2018.
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However, unlike most other investors, Accel retained a small 1.1%, which it later sold off. While Sachin Bansal, co-founder of Flipkart, had sold his entire stake to Walmart in 2018, his co-founder Binny Bansal continued to hold onto a small stake in Flipkart post-acquisition, which he divested this year in July.
