Tiger Global to exit from Flipkart and Ola with estimated $1 billion in its kitty

Soon after stepping down from Ola’s board, Lee Fixel-led Tiger Global is preparing to partially exit from its two mega bets Ola and Flipkart. The New York-based hedge fund expected to cash in about $1 billion by selling part of its equity to Softbank.

Tiger Global is expected to make a 3X return from Flipkart and whopping 5X from its bet on ride-hailing unicorn Ola. According to an Economic Times report, the investment firm is slated to sell share worth $600-700 million in Flipkart through a buyback. Meanwhile, in Ola, it will sell 15% stake for about $600 million.

Post these transactions, SoftBank will hold about 33% stake in Ola and 20% in Flipkart.

Tiger Global partially exited from Flipkart with $800 million when the Bengaluru-based company bagged $2.6 billion mega round from Japanese media and Internet conglomerate SoftBank Group Corp’s monster Vision Fund.

Last month, Ola had raised $2 billion in a round led by the investment arm of Chinese Internet giant Tencent and Softbank.

Tiger's exit: Silver lining for startup ecosystem

Exit from Flipkart and Ola are happening through the secondary sale. The secondary sale typically materialises at a discounted rate. The report mentions that secondary buyout of share in Flipkart and Ola at 30% and 10% respectively.

Tiger Global’s managing partner Lee Fixel had stepped down from the board of Ola last week.

The partial exit of Tiger Global from these companies is a good sign for the Indian startup ecosystem where the exit is hard to come by. It also signifies increased prospect of liquidity available in the Internet or technology-driven businesses.

Importantly, the exit scenario is being driven by a spike of interest in highly valued companies by two heavyweights - Softbank and Tencent.

So far, Tencent had poured-in close to $1.5 billion in Indian startups, including $700 million in Flipkart while Softbank invested about $6 billion in home-grown companies.