There have always been two major names when it comes to e-commerce websites in India – Flipkart and Snapdeal. Over the last few years, American company Amazon entered the competition and the Indian websites began struggling. In September 2016, American retailing giant Walmart started showing interest in India’s ‘Flipkart’, and they announced plans of picking up a minority stake in the company.
However, India is one of the most attractive retail markets in the world and ever since that first report of Walmart’s interest in Flipkart, their interest just increased and they recently decided to pick up a majority stake in the company, purchasing a 77% stake in the company for an amount of $16 billion, and a valuation of over $20 billion.
The deal worked out the be the largest for any Indian startup company and also the most expensive e-commerce acquisition in the world. Today, 9th May 2018, SoftBank CEO Masayoshi Son, announced this deal to the world. Flipkart was founded back in 2007 by Sachin Bansal and Binny Bansal, and knowing that the company was struggling, Sachin decided to completely sell out his stake in his baby, Flipkart.
Executive Chairman of the Bengaluru-based company, Sachin Bansal, sold his entire 5.55% stake in the company, believing that his ‘work here is done’. On the other hand, Binny Bansal only sold 0.5% of his share. Binny will will take home a cheque of $104 million (~INR 700 crore) for this sale while Sachin will take home a massive amount of $1.04 billion (~INR 7,006 crore).
His exit after 10 years of founding the company led to an emotional farewell note on his Facebook page, mentioning that it’s time to move on and that there are other things he will now have time to look at. He also said that he is handing over the baton but will continue to cheer on the company:
While this was a huge acquisition that broke records for India, the Walmart share didn’t do very well, taking a 4% plunge, with the deal meeting skepticism on Wall Street. The share price dropped to its lowest intraday price since October 2016. Keep watching Read Scoops for all updates on this story!