Walmart Spent $3.5 Bn To Buy Flipkart Shares From Tiger Global, Others This Year

Walmart spent $3.5 Bn during the six months ended July 31, 2023, to acquire Flipkart shares from non-controlling stakeholders, its regulatory filings with the SEC said.

Walmart acquired Flipkart shares from some non-controlling interest holders, which likely included Tiger Global and Accel. Walmart reportedly also bought the remaining stake of Flipkart cofounder Binny Bansal earlier this year.

As per the filing, Walmart also spent a part of the $3.5 Bn to settle the liability to former shareholders of PhonePe.

“During the six months ended July 31, 2023, the company paid $3.5 Bn to acquire shares from certain Flipkart noncontrolling interest holders and settle the liability to former noncontrolling interest holders of PhonePe,” Walmart’s filing said.

Tiger Global, the US-based investment giant, had sold a stake worth $1.4 Bn in Flipkart to Walmart, valuing the ecommerce giant at a whopping $38 Bn.

“We value Tiger Global’s involvement and support over the last several years. We remain confident in the future of Flipkart and are even more positive about the opportunity in India today than when we first invested,” a Walmart spokesperson said at the time.

Walmart also said in the filing that it received $700 Mn related to new rounds of equity funding for PhonePe. To be sure, the retailing giant also invested $200 Mn in the payments decacorn during the latter’s ongoing $1 Bn fundraising round as well.

In July, Flipkart also paid $700 Mn of cash compensation to employees as part of the separation of PhonePe from the ecommerce giant

Walmart’s international business reported net sales of $27.6 Bn during the quarter ended July 31, 2023. Around $5.8 Bn of sales of its international business came from ecommerce. However, Walmart did not specify Flipkart’s share in ecommerce sales in the segment.

Walmart has been investing heavily in India in both Flipkart and PhonePe. While it continues to raise its stake in Flipkart, Walmart is also working on a potential PhonePe IPO in 2024.

The US-headquartered retailer also spent nearly $1 Bn to pay taxes in India  due to PhonePe’s move to shift its headquarters to India.

On Flipkart, Walmart has reiterated on multiple occasions that the ecommerce company’s IPO remains a ‘long-term ambition’. 

India has been a battleground for Walmart and Amazon, as the two US-based retailing giants continue to fight to establish their dominance in the ecommerce space. While Amazon chose the organic route for India, developing the Amazon India business, Walmart acquired Flipkart in 2018 to enter the Indian ecommerce industry.

The two companies, as such, control India’s ecommerce landscape, with Flipkart and Amazon accounting for more than 90% of the market share.