Tiger Global Management or TMG’s Lee Fixel will continue to serve on the board of Flipkart even after Walmart buys a majority stake in the Bengaluru-based company, the Economic Times today reported. TMG is Flipkart’s biggest backer, and it has 20 per cent stake in the company with two representatives on the 10-member board. TMG is among the Flipkart’s major investors.
On Friday, it was reported that Flipkart board has approved 75 per cent stake sale to Walmart for USD 15 billion. Tech giant Google’s parent company Alphabet Inc would also tag along with Walmart for an investment in Flipkart.
The ET report today said that TGM will continue to hold around 5 per cent stake in Flipkart after Walmart and Google-owner Alphabet pick up the stake. According to the report, Fixel has been the key driving force behind Flipkart since its early days as his firm poured over USD 1billion, leading multiple financing rounds starting from USD 10 million in 2009 to USD 700 million in 2015.
Lee Fixel invests in tech start-ups and some of his major investments were in companies like Facebook, China’s second largest etailer JD.com and music streaming firm Spotify.
Walmart is in talks with Flipkart for around a year to acquire a controlling stake in the firm as it looks to take on rival Amazon.com in India, a market where e-commerce is tipped to grow to USD 200 billion in a decade.
Flipkart’s main investors include- US hedge fund Tiger Global Management, South African tech investor Naspers and venture capital firm Accel. Currently, SoftBank and Tiger Global own little more than 20 per cent each of Flipkart, Naspers holds nearly 13 per cent stake, Accel 6.4 per cent, while the Bansals own just over 5 per cent each of the company. According to a report, SoftBank Group Corp would sell its stake in the company for around USD 20 billion valuation.
Earlier this week, world’s biggest e-commerce player Amazon, which is Flipkart’s main competitor in India, had made a counter offer to Flipkart to buy a 60 per cent stake in the company. The deal offered by the Jeff Bezos-run company proposed to merge Flipkart entirely with its Indian arm and sought a non-compete agreement with Flipkart’s founders for 1-2 years.
However, the Flipkart board’s decision to take the Walmart offer will make it easy to get the regulatory approval. Any Flipkart-Amazon deal would have come under the scanner of the competition watchdog given their dominant market share – around 70 per cent collectively – in the Indian e-commerce market.
