After Walmart, report of Amazon eyeing a stake in Flipkart

Last Updated: Wed, Apr 04, 2018 12:28 hrs
Flipkart

Seattle based Amazon.com Inc is seeking a stake in e-commerce major Flipkart Ltd, according to a report in a leading business daily.

Flipkart, the Indian e-commerce company founded by Sachin and Binny Bansal (unrelated to each other) has reportedly been in talks with Walmart Inc for a stake sale.

A report in the Mint shed light on Amazon's intent to fetch a stake, citing a handful people in the know. The report, however could not be confirmed, with neither Amazon nor Flipkart offering comments.

The story goes on to add that Flipkart which had raised $6 billion so far had last received a funding of $1.4 billion in 2017. If the Walmart deal materialises, Flipkart's valuation could soar from $14 billion to $21 billion. Meanwhile, a deal between Amazon and Flipkart would end the e-commerce wars in the country.

While Amazon has been the global e-commerce leader, Flipkart, according to research firm Forrester controls nearly 40% of India's online retail.

The deal with Walmart was expected to aid Flipkart in fighting against Amazon, which committed an additional investment of $5 billion towards an aggressive India expansion. Walmart, the world’s largest retailer, was reportedly eyeing 55% in Flipkart via a mix of primary and secondary share purchases. People in the know suggest that Flipkart investors Tiger Global Management, Accel Partners, Naspers, IDG Ventures and others were expected to sell much or all of their shares in the Flipkart-Walmart deal. The secondary share purchases could occur at a lower valuation.

Flipkart besides the e-commerce concept is also into logistics, online payments, and grocery.

Whether a deal between Amazon and Flipkart is even possible remains to be seen, but analysts in the past few months have come up with such theories. In case an Amazon and Flipkart deal is attempted, it will have to be cleared by the Competition Commission of India.

Previously, there was the talk of Snapdeal merging with Flipkart. That was shelved after a last-minute presentation to investors by Snapdeal's founders. 

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