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Walmart plans to invest up to $2.5 billion in Flipkart and PhonePe

Walmart, the biggest retailer in the US, is reportedly spending more money into its operations in India as Western investors continue to pour significant sums of money into the race to maintain dominance in this huge Asian market.

The holdings of Accel Partners and Tiger Global in Walmart’s Indian e-commerce startup, Flipkart, will reportedly be up for sale, according to an earlier today report from the Economic Times.

According to the media outlet’s sources, the total sum to be invested would be close to $1.5 billion, which equates to a 5% ownership position in the company. If the deal goes through, Walmart will own roughly 77% of Flipkart.

Because the two private equity companies purchased their holdings in Flipkart very early in 2009, just two years after the e-commerce site was created by Sachin Bansal and Binny Bansal, their investments have been extremely lucrative for both Accel and Tiger.

Additionally, SoftBank, Tencent Holdings, and Microsoft (MSFT) have made investments in Flipkart .

Walmart significantly missed the e-commerce boat in the United States at the hands of Amazon, thus it paid roughly $16 billion to acquire the majority stake in Flipkart in 2018. Since then, it has invested heavily in the Asian nation to make sure that its subsidiary continues to dominate this market.

Flipkart may go public in the United States this year, according to a Reuters article from April of last year. The company was aiming for a valuation between $60 and $70 billion at the time. Walmart’s ownership in the Indian company would bring in at least $30 billion in gross revenue as a result.

Given the global decline in equity prices brought on by central banks’ hawkish attempts to contain inflation, it is unclear if their goals have changed.

These challenges do not appear to be stopping Walmart from increasing its wager on the Indian e-commerce business by acquiring a greater share in Flipkart.

Walmart (WMT) is investing an additional $1 billion in PhonePe, a Flipkart-born digital payments startup, to grow its interest in that business. General Atlantic, a private equity firm, and the American retailer both joined in the capital round that valued PhonePe at $12 billion.

According to rumours, Walmart may grow its ownership of PhonePe by purchasing existing stockholders’ shares. These deals might bring the total amount invested in the tech firm to $2 billion.

The majority of these sales will come from Flipkart employees who acquired stock options from PhonePe and who can choose to either hold on to them or cash them out by selling them to a third party, most likely Walmart or General Atlantic.

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