Tiger Global’s Lucrative Flipkart Journey, A $3.5 Billion Profit Exit with Walmart

Tiger Global, Flipkart & Walmart

Tiger Global, according to an undisclosed source revealed that the New York-based investment firm has successfully concluded its investment journey with Flipkart, raking in an impressive $3.5 billion in profits.

This staggering amount marks one of the highest returns Tiger Global has ever achieved from a single company globally and stands as a record for the most substantial profit earned from an Indian internet firm. Notably, the remaining 4% stake that Tiger Global held in Flipkart was sold to Walmart in the final phase of the exit.

With this latest transaction, Flipkart’s valuation reached an impressive $35 billion. Tiger Global has made significant investments in the e-commerce giant, pouring approximately $1.2 billion into the company since its initial investment in 2009.

The journey came to fruition when Walmart acquired Flipkart in a massive $16-billion deal in 2018. During this process, venture capital fund Accel Partners, too, sold its 1% stake in Flipkart to Walmart, making a profit of $1 billion from its $100 million initial investment. As a result of these deals, Walmart’s stake in Flipkart is set to rise from 72% to about 77%.

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

Notably, Tiger Global recognized the potential of e-commerce in China back in 2009 when it invested $9 million in Flipkart at a valuation of $42 million when the startup was still an online bookseller. The majority of Tiger Global’s $1.2 billion investments in Flipkart were made after 2015, during a period when the company faced challenges in securing external funds.

Throughout its investment journey, Tiger Global made strategic moves, selling shares in Flipkart to SoftBank Vision Fund in 2017, earning approximately $1 billion. Subsequently, Tiger Global entered into a nearly $2.5-billion deal with Walmart, and the final transaction yielded over $1 billion in profits.
Overall, the proceeds from Flipkart amounted to an impressive $5 billion, making it the most significant profit made by an investor from an Indian internet company.

“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.”

Despite a turbulent 2022, marked by technology valuation crashes across public and private markets, Tiger Global remains optimistic about India’s potential. The firm has been actively selling shares in its portfolio companies, including listed logistics company Delhivery and online insurance marketplace PB Fintech.

Nevertheless, Tiger Global continues to show confidence in the Indian market and has invested approximately $6.5 billion in various startups, solidifying its position as a prominent backer of India’s internet story.

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.

In the backdrop of Tiger Global’s struggle to raise its targeted $6 billion corpus for its latest vehicle, the firm’s letter to limited partners reflects its commitment to back companies with strong business fundamentals.

Despite challenges in raising the intended amount, Tiger Global continues to engage with portfolio firms and invest in promising startups, such as digital payments company PhonePe 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.

The Last Bit, Tiger Global’s successful exit from Flipkart, culminating in $3.5 billion in profits, showcases the firm’s adeptness in identifying lucrative investment opportunities. Despite the ups and downs in the market, Tiger Global’s bullish stance on India’s potential remains steadfast, and it continues to play a significant role in shaping the country’s intenet economy.