"Flipkart was a company that was built to be sold. First, the founders sold their stake to financial investors and now they are finally looking to sell a majority stake to a strategic investor,” says Harminder Sahni of Wazir Advisors. Indeed, for a company more in the news for its valuation and fundraising than anything else, things are finally falling in place. Two years after Walmart first started talking to Flipkart in 2016, the world’s largest retailer is said to have completed its due diligence and has made an offer to buy more than 51% stake in Flipkart for $10-12 billion through a mix of primary and secondary shares, which could value the company at around $20 billion. The secondary shares will be purchased at a discounted value to the primary and most of its early investors including Tiger Global, Accel Partners, Naspers, IDG Ventures and others are expected to cash out in this round. The deal is likely to be completed by the end of June. The deal raises Flipkart’s valuation by 70% from the $12 billion that it was in the previous round in August 2017, where it raised $2.5 billion from Japanese conglomerate SoftBank. For a company that was nearly written-off in its e-commerce battle with Amazon, it is a stellar comeback. For Walmart, it is the quickest way to gain scale in India, and for Amazon, acquiring Flipkart would have given it complete domination in a market that is becoming increasingly important for it.
The odds are even
Having found a serious partner with complimentary strengths and big money, Flipkart can now take the fight to Amazon
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