After SoftBank, Walmart may invest over $5Bn in Flipkart for 40% stake

Flipkart seems to be a preferred investment destination for global majors who are eyeing to grab a pie of fledgling local e-commerce market.

In less than a year, after raising over $2.5 billion from SoftBank Vision Group, Flipkart may receive another round of funding, and this time from world’s largest brick & mortar retailer Walmart.

The retail giant may invest over $5 billion for about 40 per cent stake in the Bengaluru-based company.

The US-headquartered retail major will reportedly acquire primary as well as secondary shares in Flipkart. Over the years, Amazon has eaten-up significant chunk of Walmart marketshare on the local ground (the US).

Walmart will begin due diligence at Flipkart as early as next week, reports Reuters.

According to Entrackr’s estimate, the e-commerce company will be valued more than $12 billion dollar in the fresh funding round. 

If the round materialises, Tiger Global along with some early backers will dilute their stakes in Flipkart. Currently, SoftBank owns 23.62 per cent stake in the company while Tiger Global holds 22.44 per cent of preference share capital.

The investment will give strong ground to Walmart in Indian e-commerce space which is slated to touch $100 billion mark by 2020. It will also spruce-up retail giant’s position against an old rival - Amazon in India.

Since its launch in India, Walmart has operated its business through joint ventures with Bharti Enterprises. The retail major got government approval in September 2012 to open its physical stores in India.

Since the approval, the firm has been growing exponentially in India.

A year later, Bharti and Walmart separated to pursue business independently. Presently, Walmart runs its 21 Best Price wholesale stores in nine states across India. Besides, it has also signed 20 new sites for upcoming stores.

Over the past couple of years, Walmart has acquired a slew of startups, including US-based online retailer Jet.com for a whopping $3 billion. Last month it also announced the partnership with Rakuten Inc to fight Amazon’s grocery play in Japan.