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US Advisory Firm Sues Flipkart, Walmart For Unpaid Dues: Report

US Advisory Firm Sues Flipkart, Walmart For Unpaid Dues: Report

Upstream is the first acquisition by Flipkart after the Walmart deal

WCC had reportedly introduced Upstream as a potential acquisition target

WCC alleged that Flipkart owes them $200K in consultancy charges

US-based corporate finance consulting firm, Wolet Capital Corporation (WCC), has reportedly sued Flipkart and parent company Walmart, alleging that the ecommerce major has failed to pay for its advisory services for the acquisition of Israel-based Upstream Commerce last year.

Flipkart’ buyout of Upstream Commerce in September 2018, was its first international acquisition after Walmart’s $16 Bn takeover. Upstream’s cloud-based, automated competitive pricing and product analysis capabilities would help deliver insights to sellers to optimise their product assortment and pricing strategies, Flipkart had said at the time.

According to an ET report, WCC had identified and introduced Upstream as a potential acquisition target to Flipkart, with an assurance that it would be paid for its advisory services if the transaction was closed.

The acquisition deal was reportedly valued at about $40 Mn, and that WCC invoiced Flipkart for $200K. The report citing filing has specifically named Flipkart senior executive Aakash Goyal and corporate development senior director Sankalp Gupta involved in talks with WCC for Upstream’s acquisition.

“The services were necessary for and led directly to the acquisition of Upstream. However, when the transaction closed and WCC sought payment for the Services, it was refused,” ET reported, citing the filing in the New York Southern District Court.

WCC has alleged Flipkart for breach of contract, unjust enrichment and other claims and has sought $800K in damages and costs. Reportedly, Flipkart and Walmart have yet to respond to the suit. The firm has now demanded Walmart to compensate WCC for its service.

Flipkart did not respond to Inc42’s query at the time of publishing this report.

Launched in 2010  by Amos Peleg and Shai Geva, Upstream was backed by YL Ventures as a leading investor from its inception to acquisition. At the time of its acquisition, it counted Woodcraft, Ebags, Petco, Lowe’s and SMYTHS as customers using its service. Avendus Capital was the financial advisor to Upstream Commerce, Flipkart had said in a statement.

“The team at Upstream Commerce is highly talented and as we welcome them to Flipkart we are also looking forward to making Israel one of our excellence centres to do cutting edge data science work,” the statement then said, citing Flipkart CEO Kalyan Krishnamurthy.

Author

Dipen Pradhan

Inc42 Staff
Responses
https://inc42.com/buzz/cloud-kitchen-player-faasos-in-talks-for-100-mn-funding/
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