SoftBank CEO reveals Walmart has acquired Flipkart – TechCrunch

Fundings and Exits


Right here’s a method to ensure Amazon doesn’t get management of Flipkart in India by outbidding you for a majority stake: purchase it outright. Right now throughout SoftBank’s earnings presentation, it appears like CEO Masayoshi Son slipped in a little bit scoop: he introduced that Walmart, the world’s largest retailer, on Tuesday night time reached a deal to purchase Flipkart, the main e-commerce retailer in India, placing an finish to months (and truly years) of hypothesis. SoftBank is at present one in every of Flipkart’s greatest traders.

Walmart is buying Flipkart,” Son mentioned within the presentation (he spoke in Japanese with a real-time translation offered by a SoftBank consultant). “Final night time there was the official announcement.”

Very quickly after, there was a fast and barely messy restoration: a second gentleman approached Son in the course of the Q&A bit of his presentation and slipped him a word, after which level the CEO learn it, after which mentioned an announcement had not but been confirmed.

“Close to Flipkart, it’s not formally introduced but,” he mentioned with a weak smile. “Possibly I mustn’t have talked about that … Nicely, I can’t take it out!”

“Not but introduced” can also be the road that SoftBank spokespeople are additionally taking, and we’ve but to listen to again from Flipkart and Walmart with their feedback. But it might come very quickly, although: we’ve been instructed by a supply that the official information will probably be launched at 5pm India time.

If Masa’s first assertion was correct, Walmart’s acquisition would finish a long-running saga.  For months now, there have been rumors that the world’s largest retailer was gearing as much as purchase a sizeable stake within the Indian firm to get its foot into India — with experiences placing the dimensions of the stake at anyplace between 51 p.c and round 70 p.c, and at a price of between $15 billion and $20 billion, with further traders probably together with Google.

However within the final week, various experiences began to emerge that Amazon would attempt to gazump Walmart and take a pole place as a shareholder.

Walmart and Amazon have been hotly competing towards one another in different markets, particularly the US — the place Amazon dominates in on-line gross sales however Walmart continues to steer the cost in brick-and-mortar, regardless of many aggressive strikes from Amazon, equivalent to its acquisition of Complete Meals.

In the meantime, India — Asia’s second-largest economic system after China and one of many world’s fastest-growing markets — has grow to be a key nation for Amazon over the past a number of years, with billions already ploughed into its operations there and billions extra earmarked for future funding. So when it appeared that Walmart was additionally going to attempt to muscle in by taking a stake within the nation’s largest homegrown on-line retailer, Flipkart turned the newest battleground between the 2 U.S. giants.

Walmart clearly was not prepared to surrender, although. As we identified final week, Walmart divesting its stake in Asda within the UK to Sainsbury’s would pave the way in which for the corporate to make a much bigger transfer in India, and that appears to be what has occurred right here.

It’s nonetheless not clear if Walmart will purchase out all traders with this deal, or whether or not it’ll take only a controlling share, and proceed to contain different third events.

Flipkart has raised round $7.three billion in funding since being based in 2007, with different traders together with Microsoft, eBay, Naspers, Tencent, Tiger International, Accel and plenty of extra, and it has been a consolidator of types itself, shopping for eBay India final 12 months.

However though it’s the nation’s greatest on-line retailer, it has had a rocky time when it comes to its valuation, which at one level was over $15 billion however dipped to $11.6 billion in its final spherical in 2017, partially due to fierce competitors from Amazon, Snapdeal and extra.

Apparently, we should always level out that this isn’t the primary time that Son has “introduced” an India-based tech deal forward of time.

Two years in the past throughout one other quarterly presentation, the SoftBank boss let slip that OYO — the resort aggregator service that counts SoftBank as an investor — had acquired rival Zo Rooms, a deal that had been much-speculated in India on the time.

Regardless of his reveal, the OYO-Zo deal really by no means occurred. Actually, the 2 have been at loggerheads and even went to court docket as the connection soured following the breakdown of the proposed deal.

The size of the Flipkart-Walmart tie-up is many orders of magnitude greater, with Flipkart’s India’s highest-valued startup and a poster baby for the tech trade. Let’s hope Mr. Son bought it proper this time.



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