Binny Bansal Flipkart Shares! has sold additional shares to Tiger Global. The sale pocketed Bansal upwards of $14 million, based on the Walmart’s acquisition price for Flipkart from 2018.
Flipkart co-founder Binny Bansal has sold $14 million worth of shares in the company to New York hedge fund Tiger Global, according to regulatory filings accessed through data intelligence platform Paper.vc.
This is the third time that Bansal has sold a tranche of his shares since Walmart took over the e-commerce firm.
Bansal has transferred part of his holding to two Tiger Global funds – 47,759 equity shares to existing shareholder Internet Fund III Pte Ltd and 54,596 shares to incoming shareholder Tiger Global Eight Holdings.
Tiger Global, one of the most prolific investors in startups, has increased its stake in Flipkart from 4.63 percent to 4.69 percent, according to a Registrar of Companies filing by the e-commerce giant.
“Our lower end estimate of the consideration for this sale would be approximately $14.5 million, based on the Walmart acquisition price from 2018,” said Vivek Durai, co-founder of Paper.vc.
“If we incorporate a modest increase in Flipkart’s valuation because of the growth of its subsidiary PhonePe, the number could go up to $25 million,” Durai added.
Similarly, in June, Bansal liquidated a small portion of his shareholding for $76.4 million by selling it to FIT Holdings SARL, a Walmart’s Luxembourg entity, the documents show.
Prior to that, he had sold a block of shares (1,122,433) for approximately $159 million.
In May last year, American retail giant Walmart acquired 77 percent of Flipkart at a deal of $16 billion.
As part of the deal, Bansal has transferred part of his holding to two Tiger Global funds.
Binny Bansal Flipkart Shares, From Bansal’s to Walmart
Binny Bansal, an Indian Institute of Technology, Delhi alumnus, co-founded Flipkart with Sachin Bansal in 2007.
Sachin Bansal who had left the company before Binny Bansal is also an investor. He has invested Rs 250 crore in NBFCs Altico Capital and IndoStar Capital.
Above all, Binny Bansal took charge as CEO in 2016 and was the group CEO after Walmart’s acquisition in 2018.
Flipkart owns fashion retailer Myntra and Jabong as well as digital wallet PhonePe.
However, in November last year he was forced to step down following allegations of personal misconduct, but he remains on the company’s board.
Reports suggest that the latest deal could be a part of an accelerated share sale agreement signed in November last year.
However, the question is why? The pundits are suggesting that both the Bansal co-founders weren’t too happy with the new Flipkart approach instigated by the board, precisely, among other things, constituting to roll out free movies, videos, and web-series on its app starting from august this year.
According to the business spokesperson, “Most consumers’ first touchpoint with the internet is through online video content and statistics suggest that video content and entertainment play a key role in bridging the gap for consumers to come online and experience eCommerce.”
The statement is enough to comprehend the company’s future sight and Flipkart is ensconced to compete with their largest competitor – Amazon.com
Keeping all the facts in prospect, maybe both Sachin and Binny Bansal weren’t happy with the diversification from the mainline business and thus Sachin exited last year and through selling his shares at an accelerated pace while trying his best not to hurt the company’s image in the market, Binny is following the same path, taken by his Ex co-founder.
While it still remains to be discerned; how the ongoing affairs play out and how much success they accumulate for Flipkart, yet dumping his shares for the sake of exiting due to disagreement with the board might not be the wisest decision ever taken by Binny Bansal.
Additionally, in retrospect, it may also prove to be a missed money heist.
Flipkart to roll out free movies, videos and web series on its app
Walmarts’s Indian unit Flipkart is set to roll out a free video service for all of its 160 million customers.
The ecommerce company looks for new ways to increase its user base in smaller towns and cities.
“Most consumers’ first touch point with the internet is through online video content and statistics suggest that video content and entertainment play a key role in bridging the gap for consumers to come online and experience ecommerce,” a company spokeswoman told Reuters by phone.
The company said it would offer movies, short videos and web series on its app, but added it won’t venture into original content right now.
Access to affordable smartphones and cheap internet has made India a growth market for online streaming companies.
Seems like, locked in a pitched battle for market share in the country, ecommerce firms are looking past bigger cities like Mumbai, New Delhi and Bengaluru for the next wave of growth.
Binny Bansal Flipkart Shares! Flipkart competes with Amazon.com Inc’s Indian unit in the country. Unlike Amazon’s Prime video service, Flipkart won’t charge users for streaming and won’t launch a separate application for these services, the spokeswoman said.
BY ABHINAV RANJAN & AASHISH VATS