Tiger Global proved to be the largest beneficiary during the recently concluded secondary transaction at Flipkart. The buyout of secondary shares has fetched $424 million for the US-based hedge fund.
The early backer of the decacorn, Accel India has cashed in $113.5 million during the buyout event.
The Lee Fixel-led Tiger Global had reportedly diluted an estimated 2.2 per cent stake in the process. The secondary transaction valued the Bengaluru-based company between $17-19 billion, according to business intelligence platform, paper.vc.
This is quite a significant jump in Flipkart valuation from $11.6 billion in April 2017. During that time, it raised $1.4 billion from Microsoft, Tencent and eBay. Secondary transactions are part of Softbank $2.5 billion fund infusion in Flipkart that took place in August last year.
The Masayoshi Son-led fund has reportedly allocated $800 million to $1 billion for the buyback of shares from existing investors as well as former and current employees.
Post transaction, Softbank becomes the largest stakeholder in Flipkart. It owns 23.62 per cent while Tiger Global holds 22.44 per cent of preference share capital. South Africa-based media and Internet conglomerate Naspers has 14.57 per cent of preference share capital.
Besides Tiger Global and Accel, Yuri Milner-led DST Asia sold out $53.7 million worth shares in Flipkart while Iconiq Capital bagged $49.1 million.
Meanwhile, in one of the largest transactions of employee stock options (ESOPs) in the country, Flipkart bought $100 million worth stock option from over 3,000 present and past employees, including Myntra and Jabong. The transaction completed in December last year.
Notably, it was the fourth instance of ESOPs buyback from the online retailer in the past five years.
The partial exit of Tiger Global, Accel, DST and others is a good sign for the Indian startup ecosystem where the exit is hard to come by. Such transactions increased the prospect of liquidity available in the Internet or technology-driven businesses.
Over the past six-eight months, the exit scenario has improved via secondary transactions as the heavyweight trio– Softbank, Alibaba, and Tencent have been pouring in billion of USD in large scaled Internet companies.
So far, Tencent had poured-in close to $1.5 billion in Indian startups, including $700 million in Flipkart while Softbank invested about $7 billion in home-grown companies.
The development was first reported by Businessline.