Flipkart's earliest backer Accel Partners, along with key investor Tiger Global, may partially offload its holdings to Japan's SoftBank Group Corp, which is investing $2.4 billion in the company to pick up a 20% stake, people aware of the development told VCCircle.
“The finer details of the secondary transaction are yet to be finalised,” one of the persons cited above said.
Following the $2.4-billion investment, which will be a mix of primary and secondary capital, Vision Fund will not only be one of the company’s largest shareholders but also get a seat on the Flipkart board.
A second person told VCCircle that Tiger Global, which is currently Flipkart's largest shareholder and holds close to a third in the company, may see its stake come down to around 25% after the partial exit.
VCCircle was the first to report in March that Tiger Global will partially exit its stake in Flipkart in this round. The venture capital firm, which has been dormant in investing in Indian startups for the past two years, was waiting for a strong exit from one of its portfolio companies.
For Accel, which led the Series A round in Flipkart in 2009 with $1 million, the partial exit would mean manifold returns. In an interview with VCCircle in 2014, Subrato Mitra, a partner at Accel Partners who sits on the Flipkart board, had said its investment in the e-commerce company was then worth around 300 times.
Accel holds under 10% in the e-commerce major.
Including the first tranche of $1.4 billion that came from Chinese Internet giant Tencent Holdings, US online retailer eBay and software giant Microsoft, Flipkart would be raising around $3.8 billion in the funding round, making it the largest-ever for any Indian internet startup.
Since the investment is an extension of the last round, it values Flipkart at the same $11.6 billion, down about a fourth from its $15.2-billion peak valuation in 2015. Late last month, however, a mutual fund managed by US-based investment firm Vanguard Group marked up the value of its stake in Flipkart. After the markup, Flipkart’s valuation is about $13.7 billion.
Flipkart, Accel and SoftBank did not respond to email queries from VCCircle seeking confirmation on the development.