Walmart pays $3.5 billion to extend stake in India’s Flipkart

Walmart has spent $3.5 billion this yr to accumulate shares from sure Flipkart stakeholders and resolve liabilities with some PhonePe shareholders, illustrating simply how aggressively it’s betting on India at a time when its chief world rival Amazon is scaling again on its expenditures within the South Asian market.

The $3.5 billion spending came about within the first six months of 2023, Walmart disclosed for the primary time in an SEC submitting Friday. Walmart’s possession in Flipkart now stands at about 80%.

Among the traders who offered their stakes in Flipkart this yr embody Tiger International, Accel and Flipkart co-founder Binny Bansal, an earlier Flipkart submitting confirmed. Tiger International disclosed earlier that it made an total acquire of $3.5 billion on an funding of $1.2 billion in Flipkart, its greatest win within the South Asian market.

Walmart, which additionally owns majority of PhonePe and has spent over $20 billion on the 2 companies, is ramping up its funding within the Indian e-commerce and fee platforms at a time when many different corporations, together with Amazon, have scaled again on their expenditures.

To place this determine in perspective, Amazon plans to speculate lower than $2.5 billion on its e-commerce platform in India within the subsequent seven years.

Amazon, which has invested over $11 billion on its e-commerce group and AWS in India prior to now decade, plans to speculate $15 billion extra by 2030. Of this $15 billion, Amazon has earmarked $12.7 billion for its cloud enterprise.

In an earnings name final month, Walmart mentioned PhonePe and Flipkart are persevering with to display spectacular progress.

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“Flipkart delivered robust GMV and internet gross sales progress because the core enterprise continues to develop nicely,” mentioned Walmart CFO John David Rainey.

“The group continues to work on increasing the ecosystem of product and companies like promoting, journey, and healthcare, and on delivering continued contribution revenue enchancment. Flipkart’s constant progress and efficiency reinforces our confidence within the long-term worth of this enterprise.”

India has emerged as a key battleground for world corporations as they race to seek out their subsequent billion prospects.

“India is the brand new China and the quickest rising main economic system within the coming decade and past,” Baron Capital wrote in a current fund letter.

“We imagine India presents essentially the most enticing long-term funding enchantment in our universe. Financial reforms, digitization, formalization, and rising credit score penetration favor essentially the most refined, best-managed, public firms.”

PhonePe, which separated from Flipkart, has disclosed $850 million in new funding in current quarters from plenty of traders together with Normal Atlantic, Tiger International and Walmart.