According to two people familiar with the situation who spoke to ET, New York-based investment firm Tiger Trail informed its limited partners (LPs) last week that it had completed its withdrawal from Flipkart and had earned a total gain of $3.5 billion over the previous few years of a phased selloff.
According to a person with knowledge of the situation, this is among the largest profits it has ever made from an Indian internet company and from a single company globally.
The individuals described above, who spoke on the condition of anonymity, stated that the Chase Coleman-founded Tiger informed LPs (fund sponsors) that it had sold the final 4% interest it held in Flipkart to Walmart.
In this most recent deal, Flipkart was valued at $35 billion, according to Tiger Trail.
Tiger Global and venture capital firm Accel Partners were seeking to sell their shareholding in the online retailer by selling their shares to Flipkart’s parent company, Walmart, as ET first reported on January 26.
Among Tiger Trail’s Biggest Victories
Since former executive Lee Fixel initially wrote a check for the Bengaluru startup in 2009, Tiger Global has invested over $1.2 billion in the e-commerce company, one of its most valuable bets in India. In 2018, Walmart acquired Flipkart in a $16 billion deal.
A person with knowledge of the situation said that Accel has also sold its one percent to Walmart. On its $100 million overall investment in Flipkart during the Walmart acquisition, it earned $1 billion. With these agreements, the US retail giant’s stake in Flipkart will increase from 72% to approximately 77%.
When ET contacted Tiger Trail and Accel about the sale of their shares, neither company responded.
Tiger’s overall profits from Flipkart will be among the fund’s highest cash exits, with its most lucrative investment being in the Chinese e-commerce behemoth JD.com, where it invested $200 million and earned $5 billion in return.
Tiger made the decision to invest $9 million in Flipkart in 2009 at a $42 million value when the business was an online bookseller because he recognized the potential of e-commerce in China. Tiger invested the majority of its $1.2 billion in Flipkart after 2015, when the firm encountered a tough patch and was unable to secure outside funding.
Tiger made around $1 billion when it sold its first batch of Flipkart shares to the SoftBank Vision Fund in 2017. According to those familiar with the transaction, that was followed by a sale to Walmart for close to $2.5 billion, with the latest transaction netting over $1 billion.
One of the individuals mentioned above predicted that Flipkart would generate profits of $3.5 billion and overall revenues of $5 billion. “This is an investor’s largest return from an Indian internet company,” said the investor.
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