Flipkart the amazon of india it’s a
bidding war between Walmart and Amazon
going halfway around the world as the US
Giants competed with Walmart coming out
on top this week on case studies with
the biz doc Flipkart we’re gonna go
through three parts first the
entrepreneurs and where they came from
and how they built the company second
all of the growth and millions and
millions and billions in investment that
happened in the second chapter and the
drama in the boardroom that went along
with it and finally part three the drama
between Amazon and Walmart as they bid
for the company with Walmart ultimately
coming out on top once they got this
thing going drama was the key word let’s
start with the entrepreneurs Sachin and
Binny Bansal they actually worked for
Amazon but they had this dream in a
heart for entrepreneurship to start
something on their own so they leave
Amazon and start Flipkart this was in
this 2007-2008 timeframe so here they
are operating an online book reseller
well they came from Amazon what else
would they do and in 2008 they were only
running about a hundred orders a day and
as they moved forward they begin to get
progressive and they had a dream about
acquiring companies that would be other
products that they would get and they
were off and running but there’s an
important point right here that is
really for the Western audience it may
be watching this is really gonna be
something I think is a little unique in
India see OD or cash on delivery is
highly preferred they don’t want to use
credit cards and a huge amount of the
population doesn’t have access to such a
vehicle so they have this great
preference culturally and also in terms
of risk aversion and there you had
Flipkart was now allowing you to click
online to buy something and it would be
delivered cash on delivery it was
interesting because 83% and this was a
study that was just done in 2016 so I’ve
got this next to 2010 but this is really
2016 data which just shows you how the
development of like the credit system
and just buying online with a credit
card is still in its very early stages
in India
83% of people actually prefer cash on
delivery 72% of the people in the cities
prefer it that way
90% rule so you can see how starting in
the cities there is some like one in
four now that people will use a credit
card where as out in the rural areas
nope it’s it’s cash on delivery
nonetheless this was a key tipping point
that when they added cash on delivery as
a means to accept payment so say we’ll
take the risk you click will have
somebody ship the product we’ll bring it
out to you and then it’s cash on
delivery when you purchase it that led
to a really inception point of the
growth curve on Flipkart let’s take a
look at this because we’re gonna see
some similarities between this and Ober
in terms of the investment and how kind
of this virality and e-commerce kind of
come together they raised a Series A in
2009 raised about a million dollars then
halfway through 2010 10 million dollars
Series C and middle of 2011 20 million
dollars a series d 150 million dollars
well now you can see those two years
from putting CEO D the company is taking
off it’s starting to expand and it’s
justifying a big big valuation and a big
investment so much so that we get here
into 2013 they did two rounds first a
200 million then a hundred and 60
million in what was a combined Series E
and they are now worth 1 billion dollars
so you’re sitting here six years five to
six years is all it was and all of a
sudden they have raised if you take a
look at this in excess of six hundred
million dollars and they have a 1
billion dollar valuation we get now into
this growth and drama phase here comes
the series F and take a look at 2014
bang bang bang you know we had 210
million series F 1 billion dollar series
G and a 700 million dollar series H you
don’t normally see Jesus and H is out
there it usually it’s now becomes
private placement and that’s exactly
what would happen halfway into 2015 a
700 million dollar private placement
24 months from the 1 billion dollar
valuation this thing is on a rocket sled
and it’s now worth 11 billion dollars
but there is some stuff going on behind
the scenes as to how they were putting
it together so let’s drop below the line
and take a look at a few things in 2012
thanks to this large dollar investment
they bought let’s buy which was on line
electronics think of it as Best Buy in
the cloud in India then they bought
Myntra online fashion in 2014 they
purchased them then we’re gonna get into
the capital D and drama right here
Sachin has a vision for a mobile app
only experience and he actually wants to
turn off web access to Flipkart and make
it almost exclusively mobile app the
board of directors including a gentleman
named Leif Excel which was with Tiger
and I’ll talk about them in a minute he
is a key board member and a very key
investor and actually the largest
investor at this time in this this era
and he’s like whoa whoa whoa Sachin and
so a little bit of drama starts as
Sachin gets sideways with Leif Excel
nonetheless they want to go app only and
they had done a couple of things they
did a thing called big billion day in
2014 which included an exclusive
relationship with Motorola to get the
Motorola G and the Motorola e phones
which were incredibly popular in India
Flipkart had the exclusive to sell them
which was fantastic the product
everybody won and you can only get it at
Flipkart so big billion day goes they do
a hundred million dollars on this day
and it is a PR disaster or a PR
opportunity the disaster was the system
actually crashed people were complaining
that they couldn’t get their orders
placed at all even when the system was
up there was shortages of things they
people protested and actually wrote the
government saying I got an email two
days later where it says that there’s a
shortage and they can’t shift my phone
well they didn’t pay anything but they
also didn’t get anything and they were
pissed off and spent writing letters to
their congressmen basically in India and
expressing that in 2015 they said okay
we’ve got new scheme
we’ve invested in IT and our back-end
and it’s gonna be big billion day to
dotto and they did 300 million over a
three-day period and they started
pushing app only well there’s a couple
things that happened here that had very
mixed results so Sachin is emboldened by
the fact that he sees this working even
though one year there was some real
struggles in the following year you know
they got it right what was also going on
here is they forced Myntra one of their
own properties remember the online
fashion group that they bought in to do
web only and you can see the growth that
was going like this when they did that
to Myntra on fashion 10% negative growth
year over year in mantras revenue so
everybody goes whoa we’re going like
this and we managed to kill Myntra well
they came back in 2016 they said okay
okay okay it’s gonna be on the app but
we’re also gonna relaunch them intra web
all of this comes together here are
we’ve seen all this money look all of a
sudden they take a year off raising
money to do what the board fought and
there was a lot of drama on it and I
want to take you through it a little bit
and take you through the story of what
was going on with that board this is
leaf Excel in 2009 he met the Bonsall
brothers Sachin and Binny and he really
had a close relationship with Sachin so
here you have leaf excel at tiger and he
is investing in India and he is a
believer and stepping back for a second
for people that don’t know tiger tiger
incredible investment group founded in
2001 by this guy chase Coleman and he
originally had a hedge fund but he had a
portfolio of tech investments in the
internet and tech that is in the US
China and India and he sent to India two
guys Feroz Dhawan here and leaf Excel
and leaf Excel he went big took about
two billion dollars was investing into
India all over the place and about half
of that was put into Flipkart so you can
see what I mean Tiger was a massive
investor in Flipkart well 2014 to 15 man
leaf Excel was on this just absolute
investment series a
she was putting seriousiy money into all
kinds of companies in India even as
Dhawan his partner there was getting
kind of concerned says you know we
really need to show some returns here
well Dhawan and fix all kind of clash
and Dhawan left tiger leaving thick cell
to lead this whole group so we can
already see that six excel is kind of a
bold guy that does things you know his
own way in his own style so now you can
see that leaf excel has a very strong
personality under himself given what was
happening at Tiger but you also have
Sachin who has a very strong personality
himself that says I got ideas and I’m
gonna put him into play so nonetheless
those two clashed and when they clashed
they clash big and thick cell eventually
in 2017 puts this guy in the CEO si
Kalyan Krishna Murthy so we now have a
new CEO and a founder who’s been bumped
up to chairman go take a look at the
uber case study and look what happened
to that CEO sometimes founder CEOs their
ego and decisions get up to a place for
changes forced by the board and if you
lose the board’s support later you’re
not gonna get a free pass on some of
your mistakes the board is gonna move
you even though you may own 50 60
percent of your own company the board’s
gonna move you in favor of new
leadership and that’s what happened here
regardless of what you may think about
leaf Excel and what he was doing at
Tiger so now we have the new CEO in
place and look what happens in 17 they
raise four billion dollars if you take a
look at what was going on there they’ve
got 40 percent market share and they
raise four billion dollars in seventeen
and that is barely 10 years from when
they started and there is only one word
for then that is damn that is a lot of
market share in India and that is a lot
of money and it was Softbank that would
now become a larger investor than tiger
investing 2.5 billion of the four
billion dollars so that takes this up to
here and along the way just to put it
into perspective i’ve been talking about
the investment dollars but there’s been
a very steady run in the revenue and
let’s take a look 16
2.3 billion dollars u.s.
dollars in revenue and they lost 1.3
billion Hey they are the Amazon of India
they lose money at an alarming rate
just like Amazon did or used to in the
United States and then 4.6 billion in
revenue up in 17 so you can see all this
was running really big and raising a lot
of money there was something else that
they did about the time they shifted
CEOs is they attempted to go after
Snapdeal Amazon Snapdeal and Flipkart
combined for almost a hundred percent of
the market share in India for this
online commerce and if they had bought
Snapdeal they offered them seven hundred
eight hundred million
Snapdeal said no we want a billion in a
retrospect it looks like they should
have PO need up the extra 300 million
lord knows they were able to raise that
kind of money well that would have given
them about 66 percent market share an
absolute crushing Overlord position
versus Amazon instead that deal falls
through because of the gap in valuation
what they wanted to pay so this takes us
to the end of the growth and drama
because now as you’ve seen in my past
case studies where you get people and
companies raising this kind of money
after the private equity comes debt
because you’d think you can pay it back
and you’re no longer giving up equity
and with a bank in India they raised 150
million dollars in debt which compared
to the four billion they’re raising is
like a Starbucks card but nonetheless
they went off and raised it we now get
to the acquisition now their conspiracy
theorists out there that would say the
Snapdeal was a head-fake
they really wanted to make this deal to
cause outside interest oh like Amazon
like Google like Walmart to think oh my
gosh if these guys are at 66% of India
there goes our opportunity to be in
India I don’t think so
I think this was a real attempt to go
and make the purchase nonetheless it’s
interesting fodder for discussion to say
this was a head-fake to say oh my gosh
we better buy them before they buy
Snapdeal or come back around on this
because then there’ll be too big for us
to deal with and they’ll have a huge
presence in India they’ll have power and
influence with the government we don’t
want all that and by the way Walmart was
actually only selling as a wholesale
unit into India small retailers because
they were not allowed by law as a
foreign company to actually sell
directly to consumers so there was
already laws around there that were
trying to protect the home team a little
bit I think it’s a little more dramaa to
there than I’ve Illustrated but you get
the point
so now we go to the acquisition and the
deal drama this is now a board fight and
a acquirer fight first the board fight
you know you’ve got Sachin sitting in
the corner pouting because he wants a
bigger role back in the company you know
you’ve got leaf Excel and the board kind
of got Benny a little bit on their side
and they’re still moving forward and
there was so much good news here that
was kind of cancelling out some of the
drama nonetheless Amazon and Walmart
show up Amazon makes a twenty two
billion dollar bid twe which stands for
the whole enchilada and Sachin and
Softbank were kind of kind of there so
Sachin kind of had Softbank in his
corner they kind of wanted to do it this
way and Sachin was hoping that he would
have a prominent role with Amazon when
the deal is done
leaf Excel was like hell no you’re not
going to be in a more prominent role if
we do this deal Lee was in favor along
with the board and ultimately they would
get Binney to go with them to take the
Walmart deal where Walmart for sixteen
billion dollars by seventy seven percent
of the company now I got this little
description here five ish and 11 ish at
the time Walmart had something close to
six billion dollars on their balance
sheet in cash and yet they paid 16 for
this so it means that Walmart took out a
big mouthful of debt to get this done so
it was at five and eleven Walmart hasn’t
said exactly what it is was at four and
twelve don’t know but it’s safe to say
that Walmart has at least 10 billion
dollars in new debt on the acquisition
invoice for Flipkart
they also interesting they put a four
year IPO time
on it so Walmart is looking at growth of
the company and they certainly believe
that their operation efficiencies are
going to reduce these losses as well as
that there’s going to be a public
currency out of this so in four years it
states that Walmart intends to take it
public at the acquisition price or
higher but not less than the acquisition
price so the valuation connected to the
acquisition price actually is what it is
and then Amazon they’re out of the deal
Google is still in talks to this day you
know while not only a seventy seven
percent so Google’s got a lot of big
data and they’re not interested in and
seeing Amazon take off and do things at
all and so Google is more likely to find
Walmart to be a friendly partner to
potentially come in and eBay was part of
this something happened over here where
Flipkart actually licensed the name from
eBay and was running eBay India when
this deal happens eBay got a billion
dollars from Walmart and they cancelled
the licensing deal with Flipkart and
they said that we’re gonna relaunch I
really like to know how that works
you got this sort of market share and
everything you get a billion dollars
back you cancel the License Agreement
say I’m gonna go it alone and relaunch
my brand well we’ll see how that works
nonetheless the deal is done it’s
awaiting regulatory approval but it
looks good and Walmart is going to own
Flipkart so let’s talk about Walmart
just for a second in the middle of all
this some people are saying wow that was
an expensive acquisition their stock
price is gonna take a hit I think this
is a strategic deal long term for
Walmart I think it’s one they had to
make because whether you believe the
attempted deal for snap deal was a
head-fake buy Flipkart or a real
transaction they were trying to do it
still would have spelled trouble for
Walmart getting into the Indian market
and they were already trying to compete
against Amazon which seems to be like a
blob coming over the top of them in the
United States with a little bit of
competition also from Target I think
Walmart strategically had to do it
they’re battling they’re in a cage match
battling in the United States with
Amazon
and this gives them a play here and if
they bring their efficiencies to the
table and reduce those losses guess what
they’ve got a tremendously profitable
opportunity in India with a tremendous
amount of upside remember some studies
are saying that less than 25% of the
Indian population is actually made and
e-commerce purchase which means there’s
huge upside and if Walmart with Flipkart
was such an out and a cooperative happy
board and great executives in place if
they can meld that and make it run
they’ve got a jewel that’s gonna add to
their value globally let me know what
you thought about this case study add
the comments below and take a look at
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bidding war between Walmart and Amazon
going halfway around the world as the US
Giants competed with Walmart coming out
on top this week on case studies with
the biz doc Flipkart we’re gonna go
through three parts first the
entrepreneurs and where they came from
and how they built the company second
all of the growth and millions and
millions and billions in investment that
happened in the second chapter and the
drama in the boardroom that went along
with it and finally part three the drama
between Amazon and Walmart as they bid
for the company with Walmart ultimately
coming out on top once they got this
thing going drama was the key word let’s
start with the entrepreneurs Sachin and
Binny Bansal they actually worked for
Amazon but they had this dream in a
heart for entrepreneurship to start
something on their own so they leave
Amazon and start Flipkart this was in
this 2007-2008 timeframe so here they
are operating an online book reseller
well they came from Amazon what else
would they do and in 2008 they were only
running about a hundred orders a day and
as they moved forward they begin to get
progressive and they had a dream about
acquiring companies that would be other
products that they would get and they
were off and running but there’s an
important point right here that is
really for the Western audience it may
be watching this is really gonna be
something I think is a little unique in
India see OD or cash on delivery is
highly preferred they don’t want to use
credit cards and a huge amount of the
population doesn’t have access to such a
vehicle so they have this great
preference culturally and also in terms
of risk aversion and there you had
Flipkart was now allowing you to click
online to buy something and it would be
delivered cash on delivery it was
interesting because 83% and this was a
study that was just done in 2016 so I’ve
got this next to 2010 but this is really
2016 data which just shows you how the
development of like the credit system
and just buying online with a credit
card is still in its very early stages
in India
83% of people actually prefer cash on
delivery 72% of the people in the cities
prefer it that way
90% rule so you can see how starting in
the cities there is some like one in
four now that people will use a credit
card where as out in the rural areas
nope it’s it’s cash on delivery
nonetheless this was a key tipping point
that when they added cash on delivery as
a means to accept payment so say we’ll
take the risk you click will have
somebody ship the product we’ll bring it
out to you and then it’s cash on
delivery when you purchase it that led
to a really inception point of the
growth curve on Flipkart let’s take a
look at this because we’re gonna see
some similarities between this and Ober
in terms of the investment and how kind
of this virality and e-commerce kind of
come together they raised a Series A in
2009 raised about a million dollars then
halfway through 2010 10 million dollars
Series C and middle of 2011 20 million
dollars a series d 150 million dollars
well now you can see those two years
from putting CEO D the company is taking
off it’s starting to expand and it’s
justifying a big big valuation and a big
investment so much so that we get here
into 2013 they did two rounds first a
200 million then a hundred and 60
million in what was a combined Series E
and they are now worth 1 billion dollars
so you’re sitting here six years five to
six years is all it was and all of a
sudden they have raised if you take a
look at this in excess of six hundred
million dollars and they have a 1
billion dollar valuation we get now into
this growth and drama phase here comes
the series F and take a look at 2014
bang bang bang you know we had 210
million series F 1 billion dollar series
G and a 700 million dollar series H you
don’t normally see Jesus and H is out
there it usually it’s now becomes
private placement and that’s exactly
what would happen halfway into 2015 a
700 million dollar private placement
24 months from the 1 billion dollar
valuation this thing is on a rocket sled
and it’s now worth 11 billion dollars
but there is some stuff going on behind
the scenes as to how they were putting
it together so let’s drop below the line
and take a look at a few things in 2012
thanks to this large dollar investment
they bought let’s buy which was on line
electronics think of it as Best Buy in
the cloud in India then they bought
Myntra online fashion in 2014 they
purchased them then we’re gonna get into
the capital D and drama right here
Sachin has a vision for a mobile app
only experience and he actually wants to
turn off web access to Flipkart and make
it almost exclusively mobile app the
board of directors including a gentleman
named Leif Excel which was with Tiger
and I’ll talk about them in a minute he
is a key board member and a very key
investor and actually the largest
investor at this time in this this era
and he’s like whoa whoa whoa Sachin and
so a little bit of drama starts as
Sachin gets sideways with Leif Excel
nonetheless they want to go app only and
they had done a couple of things they
did a thing called big billion day in
2014 which included an exclusive
relationship with Motorola to get the
Motorola G and the Motorola e phones
which were incredibly popular in India
Flipkart had the exclusive to sell them
which was fantastic the product
everybody won and you can only get it at
Flipkart so big billion day goes they do
a hundred million dollars on this day
and it is a PR disaster or a PR
opportunity the disaster was the system
actually crashed people were complaining
that they couldn’t get their orders
placed at all even when the system was
up there was shortages of things they
people protested and actually wrote the
government saying I got an email two
days later where it says that there’s a
shortage and they can’t shift my phone
well they didn’t pay anything but they
also didn’t get anything and they were
pissed off and spent writing letters to
their congressmen basically in India and
expressing that in 2015 they said okay
we’ve got new scheme
we’ve invested in IT and our back-end
and it’s gonna be big billion day to
dotto and they did 300 million over a
three-day period and they started
pushing app only well there’s a couple
things that happened here that had very
mixed results so Sachin is emboldened by
the fact that he sees this working even
though one year there was some real
struggles in the following year you know
they got it right what was also going on
here is they forced Myntra one of their
own properties remember the online
fashion group that they bought in to do
web only and you can see the growth that
was going like this when they did that
to Myntra on fashion 10% negative growth
year over year in mantras revenue so
everybody goes whoa we’re going like
this and we managed to kill Myntra well
they came back in 2016 they said okay
okay okay it’s gonna be on the app but
we’re also gonna relaunch them intra web
all of this comes together here are
we’ve seen all this money look all of a
sudden they take a year off raising
money to do what the board fought and
there was a lot of drama on it and I
want to take you through it a little bit
and take you through the story of what
was going on with that board this is
leaf Excel in 2009 he met the Bonsall
brothers Sachin and Binny and he really
had a close relationship with Sachin so
here you have leaf excel at tiger and he
is investing in India and he is a
believer and stepping back for a second
for people that don’t know tiger tiger
incredible investment group founded in
2001 by this guy chase Coleman and he
originally had a hedge fund but he had a
portfolio of tech investments in the
internet and tech that is in the US
China and India and he sent to India two
guys Feroz Dhawan here and leaf Excel
and leaf Excel he went big took about
two billion dollars was investing into
India all over the place and about half
of that was put into Flipkart so you can
see what I mean Tiger was a massive
investor in Flipkart well 2014 to 15 man
leaf Excel was on this just absolute
investment series a
she was putting seriousiy money into all
kinds of companies in India even as
Dhawan his partner there was getting
kind of concerned says you know we
really need to show some returns here
well Dhawan and fix all kind of clash
and Dhawan left tiger leaving thick cell
to lead this whole group so we can
already see that six excel is kind of a
bold guy that does things you know his
own way in his own style so now you can
see that leaf excel has a very strong
personality under himself given what was
happening at Tiger but you also have
Sachin who has a very strong personality
himself that says I got ideas and I’m
gonna put him into play so nonetheless
those two clashed and when they clashed
they clash big and thick cell eventually
in 2017 puts this guy in the CEO si
Kalyan Krishna Murthy so we now have a
new CEO and a founder who’s been bumped
up to chairman go take a look at the
uber case study and look what happened
to that CEO sometimes founder CEOs their
ego and decisions get up to a place for
changes forced by the board and if you
lose the board’s support later you’re
not gonna get a free pass on some of
your mistakes the board is gonna move
you even though you may own 50 60
percent of your own company the board’s
gonna move you in favor of new
leadership and that’s what happened here
regardless of what you may think about
leaf Excel and what he was doing at
Tiger so now we have the new CEO in
place and look what happens in 17 they
raise four billion dollars if you take a
look at what was going on there they’ve
got 40 percent market share and they
raise four billion dollars in seventeen
and that is barely 10 years from when
they started and there is only one word
for then that is damn that is a lot of
market share in India and that is a lot
of money and it was Softbank that would
now become a larger investor than tiger
investing 2.5 billion of the four
billion dollars so that takes this up to
here and along the way just to put it
into perspective i’ve been talking about
the investment dollars but there’s been
a very steady run in the revenue and
let’s take a look 16
2.3 billion dollars u.s.
dollars in revenue and they lost 1.3
billion Hey they are the Amazon of India
they lose money at an alarming rate
just like Amazon did or used to in the
United States and then 4.6 billion in
revenue up in 17 so you can see all this
was running really big and raising a lot
of money there was something else that
they did about the time they shifted
CEOs is they attempted to go after
Snapdeal Amazon Snapdeal and Flipkart
combined for almost a hundred percent of
the market share in India for this
online commerce and if they had bought
Snapdeal they offered them seven hundred
eight hundred million
Snapdeal said no we want a billion in a
retrospect it looks like they should
have PO need up the extra 300 million
lord knows they were able to raise that
kind of money well that would have given
them about 66 percent market share an
absolute crushing Overlord position
versus Amazon instead that deal falls
through because of the gap in valuation
what they wanted to pay so this takes us
to the end of the growth and drama
because now as you’ve seen in my past
case studies where you get people and
companies raising this kind of money
after the private equity comes debt
because you’d think you can pay it back
and you’re no longer giving up equity
and with a bank in India they raised 150
million dollars in debt which compared
to the four billion they’re raising is
like a Starbucks card but nonetheless
they went off and raised it we now get
to the acquisition now their conspiracy
theorists out there that would say the
Snapdeal was a head-fake
they really wanted to make this deal to
cause outside interest oh like Amazon
like Google like Walmart to think oh my
gosh if these guys are at 66% of India
there goes our opportunity to be in
India I don’t think so
I think this was a real attempt to go
and make the purchase nonetheless it’s
interesting fodder for discussion to say
this was a head-fake to say oh my gosh
we better buy them before they buy
Snapdeal or come back around on this
because then there’ll be too big for us
to deal with and they’ll have a huge
presence in India they’ll have power and
influence with the government we don’t
want all that and by the way Walmart was
actually only selling as a wholesale
unit into India small retailers because
they were not allowed by law as a
foreign company to actually sell
directly to consumers so there was
already laws around there that were
trying to protect the home team a little
bit I think it’s a little more dramaa to
there than I’ve Illustrated but you get
the point
so now we go to the acquisition and the
deal drama this is now a board fight and
a acquirer fight first the board fight
you know you’ve got Sachin sitting in
the corner pouting because he wants a
bigger role back in the company you know
you’ve got leaf Excel and the board kind
of got Benny a little bit on their side
and they’re still moving forward and
there was so much good news here that
was kind of cancelling out some of the
drama nonetheless Amazon and Walmart
show up Amazon makes a twenty two
billion dollar bid twe which stands for
the whole enchilada and Sachin and
Softbank were kind of kind of there so
Sachin kind of had Softbank in his
corner they kind of wanted to do it this
way and Sachin was hoping that he would
have a prominent role with Amazon when
the deal is done
leaf Excel was like hell no you’re not
going to be in a more prominent role if
we do this deal Lee was in favor along
with the board and ultimately they would
get Binney to go with them to take the
Walmart deal where Walmart for sixteen
billion dollars by seventy seven percent
of the company now I got this little
description here five ish and 11 ish at
the time Walmart had something close to
six billion dollars on their balance
sheet in cash and yet they paid 16 for
this so it means that Walmart took out a
big mouthful of debt to get this done so
it was at five and eleven Walmart hasn’t
said exactly what it is was at four and
twelve don’t know but it’s safe to say
that Walmart has at least 10 billion
dollars in new debt on the acquisition
invoice for Flipkart
they also interesting they put a four
year IPO time
on it so Walmart is looking at growth of
the company and they certainly believe
that their operation efficiencies are
going to reduce these losses as well as
that there’s going to be a public
currency out of this so in four years it
states that Walmart intends to take it
public at the acquisition price or
higher but not less than the acquisition
price so the valuation connected to the
acquisition price actually is what it is
and then Amazon they’re out of the deal
Google is still in talks to this day you
know while not only a seventy seven
percent so Google’s got a lot of big
data and they’re not interested in and
seeing Amazon take off and do things at
all and so Google is more likely to find
Walmart to be a friendly partner to
potentially come in and eBay was part of
this something happened over here where
Flipkart actually licensed the name from
eBay and was running eBay India when
this deal happens eBay got a billion
dollars from Walmart and they cancelled
the licensing deal with Flipkart and
they said that we’re gonna relaunch I
really like to know how that works
you got this sort of market share and
everything you get a billion dollars
back you cancel the License Agreement
say I’m gonna go it alone and relaunch
my brand well we’ll see how that works
nonetheless the deal is done it’s
awaiting regulatory approval but it
looks good and Walmart is going to own
Flipkart so let’s talk about Walmart
just for a second in the middle of all
this some people are saying wow that was
an expensive acquisition their stock
price is gonna take a hit I think this
is a strategic deal long term for
Walmart I think it’s one they had to
make because whether you believe the
attempted deal for snap deal was a
head-fake buy Flipkart or a real
transaction they were trying to do it
still would have spelled trouble for
Walmart getting into the Indian market
and they were already trying to compete
against Amazon which seems to be like a
blob coming over the top of them in the
United States with a little bit of
competition also from Target I think
Walmart strategically had to do it
they’re battling they’re in a cage match
battling in the United States with
Amazon
and this gives them a play here and if
they bring their efficiencies to the
table and reduce those losses guess what
they’ve got a tremendously profitable
opportunity in India with a tremendous
amount of upside remember some studies
are saying that less than 25% of the
Indian population is actually made and
e-commerce purchase which means there’s
huge upside and if Walmart with Flipkart
was such an out and a cooperative happy
board and great executives in place if
they can meld that and make it run
they’ve got a jewel that’s gonna add to
their value globally let me know what
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