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Tiger trail at Flipkart ends with $3.5 billion profits; fund sells remaining stake to Walmart, ET Retail

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New York-headquartered investment firm Tiger Global informed its limited partners (LPs) last week that it has completed its exit from Flipkart, snagging $3.5 billion in total gains over the past few years of a phased selloff, two people in the know of the matter told ET.

This is among the most it has generated from a single company globally, and also the highest profit it has managed from an Indian internet firm, said a person with knowledge of the matter.

The Chase Coleman-founded Tiger told LPs (fund sponsors) it had sold the remaining 4% stake it held in Flipkart to Walmart, said the people cited above on condition of anonymity.

Flipkart was valued at $35 billion in this latest transaction, Tiger said.

ET first reported on January 26 that Tiger Global and venture capital fund Accel Partners were looking to liquidate their holdings in the online retailer by selling their shares to Flipkart’s parent, Walmart.

Among biggest gains for Tiger

Among its prized bets in India, Tiger Global invested nearly $1.2 billion in the ecommerce company since former executive Lee Fixel first cut a cheque for the Bengaluru startup in 2009. Walmart took over Flipkart in 2018 in a $16-billion deal.

Accel has also sold its 1% to Walmart, confirmed a person familiar with the development. It took home $1 billion on its total investment of $100 million in Flipkart during the Walmart acquisition. The US retail giant’s stake in Flipkart will rise to about 77%, from 72%, with these deals.

Tiger Global and Accel did not respond to ET’s queries on the sale of their shares.

Tiger’s overall gains from Flipkart will rank among the largest cash exits for the fund, with its most successful investment being in Chinese ecommerce giant JD.com, where it pulled out $5 billion after ploughing in $200 million.

Seeing the potential of ecommerce in China, Tiger decided in 2009 to pump $9 million into Flipkart at a valuation of $42 million, when the startup was an online bookseller. Most of the $1.2 billion deployed by Tiger in Flipkart came after 2015, when the company hit a rough patch and was unable to shore up external funds.

Tiger first sold shares in Flipkart to SoftBank Vision Fund in 2017, racking up about $1 billion. That was followed by a nearly $2.5-billion sale to Walmart, with the current transaction bringing in over $1 billion, said people familiar with the deal.

“Overall proceeds from Flipkart will top $5 billion and the gains are $3.5 billion,” said one of the persons cited above. “This is the largest profit for an investor from an Indian internet company.”

India story

Coming off a turbulent 2022 due to a crash in technology valuations across public and private markets, Tiger has been selling big portions of its shares in portfolio companies. In India, it has exited listed logistics company Delhivery and online insurance marketplace PB Fintech (PolicyBazaar), while partially selling its stakes in food delivery major Zomato.

ET reported on May 24 that Tiger Global has held talks to pick up a financial stake in Indian Premier League franchise Rajasthan Royals, according to people in the know of the matter. Tiger remains bullish on India, a person privy to the fund’s thinking said. It has deployed around $6.5 billion in the domestic market across early- to late-stage startups over the years, emerging as the most prolific backer of India’s internet story.

Tiger’s letter to LPs comes in the background of the US fund struggling to raise the targeted $6 billion corpus for its latest vehicle. It only secured $2 billion, Financial Times reported in June, as LPs have turned chary, seeing the massive correction in tech stocks in the public markets since the end of 2021.

Scott Shleifer, global head for private investments at Tiger Global, who has been leading the fund’s India investments, and other executives such as Alex Cook, have held meetings over the past year with portfolio firms, where they mentioned they will continue to back companies with fundamentally strong businesses.

So far this year, Tiger has participated in digital payments company PhonePe’s ongoing funding round (Walmart owns a majority in PhonePe), and invested in EV battery swapping network Battery Smart and industrial Internet of Things startup Infinite Uptime, amid a sharp drop in venture funding.

  • Published On Jul 31, 2023 at 08:13 AM IST

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