American retail giant Walmart Inc is picking up a 77% stake in domestic online retailer Flipkart for $16 billion (Rs 1.12 lakh crore) in the largest e-commerce deal ever struck anywhere in the world. The deal values the 11-year-old Flipkart at approximately $21 billion (Rs 1.47 lakh crore).
This catapults the poster boy of Indian e-tail to among the most valued internet startups in the world. It also brings to an end the independent run of Flipkart, founded by two twenty-something, IIT-Delhi engineers, which spawned a brand new generation of internet entrepreneurs in the country.
The first to report that Walmart was looking to get a majority shareholding in the Bengaluru web retailer at a $20 billion valuation. The new structure would see Flipkart’s co-founder, chairman and longest serving CEO, Sachin Bansal, sell off his 5.5% stake and exit the company completely, Binny Bansal, Flipkart’s other co-founder, will stay on as the group CEO, and go on to take the executive chairman’s role at least for the next two years, as part of the terms of the deal. Kalyan Krishnamurthy, the present CEO of Flipkart, also continues in his role.
Walmart’s recent investments in e-commerce have helped it shore its online revenues and grow it by 50% in the US. A lot of the focus on online retail has come after Walmart acquired Jet.com for $3 billion. Its founder Marc Lore came on board in late 2016 and has since been spearheading Walmart.com.