- World’s largest retail giant Walmart buys 77% stakes in Flipkart
- Sachin Bansal, co-founder and ex-CEO exits Flipkart, sells his entire 6% stakes
- Binny Bansal, co-founder, to continue as CEO of Flipkart
- Deal estimates around $21 Billion (1.47 lakh crore)
After a decade of being the market leader of e-commerce in India, Flipkart is now set to enter a new era. The much-hyped Flipkart Walmart deal saw the world’s largest retail giant Walmart acquire a whooping 77% stakes in India’s largest online retailer Flipkart.
Sachin Bansal, Chairman and the longest serving CEO (also, co founder with Binny Bansal) sold his entire 6% stake to the retail giant Walmart. With this, he also exists the company entirely. The deal is set to fetch him over $1 billion (₹6700 Crore approx.) alone.
Flipkart was started in 2009 by Sachin Bansal and Binny Bansal, two young engineers from Indian Institute of Technology, Delhi. It is currently listed among the 15 most valuable startups of the world. As of May 2018, the Indian e-commerce giant is valued at about $20.8 billion and has about 54 million active customers across the country. In the period of 2017-18 alone, Flipkart processed orders worth $7.5 billion.
The Flipkart Walmart Deal
The deal which was in talks since 2016 was completed with Walmart buying out the current stakeholders including SoftBank (22.3%), Tiger Global (22%), Naspers (13.8%) and Accel India & US (6.9%) among others.
In 2016, Walmart initiated the deal with an investment of $2 billion as the primary capital. Many investment expert and trade analysts believe that the deal is overpriced and that Walmart may have overpaid for its venture in the Indian marketplace.
However, Flipkart is the largest online marketplace in India both in terms of revenue and customer base. It also holds the fashion marketplace Myntra along with stakes in many others. Hence, the deal outcomes will be depending on what Douglas McMillon, the CEO of Walmart has in his blueprint for the expansion of his business stake in the Indian marketplace, competing Amazon.
On his new venture, the President and CEO of Walmart, Douglas McMillon said to Flipkart employees, asserting that the investment was one of his best decisions,
This is the best place to be anywhere in the world
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