US venture capital firm Accel Partners and hedge fund Tiger Global Management, Flipkart early backers, are all set to make partial exit following SoftBank Vision Fund’s infusion of $2.5 billion, which will be a mix of primary and secondary capital, in e-commerce major.
The latest deal may lead to SoftBank picking up a 20% stake. Though the details of the secondary transaction are yet to be finalised, according to persons aware of the development.
Tiger Global stakes in Flipkart was left to 25%, from 33-35%, following April funding round in Flipkart. The investment firm had invested around $1 billion in the company. Post latest influx, Tiger Global will be left with 18 % stake, which is worth $2 billion as per post money valuation, in Flipkart. Lee Fixel is now expected to register the biggest exit for Tiger Global from India.
Whereas for Accel Partners, which led the Series A round in Flipkart in 2009 with $1 million, the partial exit would mean manifold returns. Accel holds under 10% in the e-commerce major.
Earlier, the Bengaluru-based company, has raised $1.4 billion in April from China’s Tencent, online marketplace eBay and software giant Microsoft. With the addition of latest round, Bengaluru-based company will now have more than $4 billion of cash, the company said in a statement.
Prior to the latest SoftBank investment, Tiger Global, South Africa’s Naspers and Indian venture capital firm Accel Partners were some of Flipkart’s major backers.
SoftBank, the biggest investor in India’s cab hailing service Ola and hotel aggregator Oyo, is eager to play a more active role in India’s e-commerce sector, which is expected to drive sales upwards of $35 billion by 2020.
Since the investment is an extension of the last round, it values Flipkart at the same $11.6 billion, down about a fourth from its $15.2-billion peak valuation in 2015. According to US-based investment firm Vanguard Group, after latest round, Flipkart’s valuation is about $13.7 billion.
Flipkart did not answer queries from Entrackr seeking details and confirmation on the latest development.