End of an era as Binny Bansal, Accel and Tiger Global exit Flipkart with bumper returns

Binny Bansal, co-founder of Flipkart, the e-commerce giant

Binny Bansal, co-founder of Flipkart, along with Accel, one of the company's earliest investors, and US-based Tiger Global Management have all fully exited the e-commerce giant by selling their stakes to Walmart, multiple people aware of the matter told Moneycontrol.

Accel, both India and US together held more than 20 percent in Flipkart initially when they backed the company in 2008, but gradually reduced their stake to about 6 percent before Walmart acquired a majority share in Flipkart in 2018, according to Tracxn, a private markets data provider.

However, unlike most other investors, Accel retained a small 1.1 percent stake more recently after the acquisition, only to fully exit the company in 2023, generating cumulative returns of around $1.5-2 billion, two people in the know told Moneycontrol, generating a whopping 25-30X return on its total investment of about $60-80 million over the years.

Similarly, Tiger Global also held a minority stake in Flipkart after the Walmart acquisition but has now exited the company, making gains of approximately $3.5 billion, as reported by the Wall Street Journal.

While Sachin Bansal, co-founder of Flipkart, had already sold his entire stake to Walmart in 2018, his co-founder Binny Bansal continued to hold onto a small stake in Flipkart post-acquisition.

Binny Bansal has now also divested his remaining stake to Walmart, and according to three of the people cited above, he has made about $1-1.5 billion since inception to exit, another source added. The deal took place at a valuation of around $35 billion, reflecting Flipkart's growth.

“Binny (Bansal) has sold his remaining 1-1.5 percent stake in Flipkart but will continue to remain on the company’s board,” one of the people cited above said.

At the same time, Binny Bansal is already an investor in PhonePe and sits on the payments giant's board.

“In total, Binny (Bansal) would have made a billion and a half just by fully selling his stake in Flipkart over time,” another person aware of the developments told Moneycontrol.

Binny Bansal did not immediately respond to WhatsApp messages.

Confirming the developments to Moneycontrol, a Walmart spokesperson said the company has acquired additional shares of Flipkart from some investors, including Tiger Global, but did not reveal more names.

"We value Tiger Global’s involvement and support over the last several years. We remain confident in the future of Flipkart and are even more positive about the opportunity in India today than when we first invested. We continue to be impressed with Flipkart’s progress and remain focused on building a healthy, sustainable and profitable business for the long term, ensuring Flipkart continues to grow in an emerging and dynamic market," the spokesperson said.

Key highlights

The deal talks were in the works since last year when Flipkart still held stake in PhonePe, reflecting some gains from the growth of the payments giant as well. PhonePe was first acquired by Flipkart in 2016, but was hived off partially as a separate entity in 2020 and fully in 2022.

These developments also come exactly five years after the US-based retailer had bought 77 percent in Flipkart for $16 billion in May 2018, and sources close to the developments said the exits could be linked to that timeline.

Flipkart was started in 2007 when it only sold books online and operated out of an apartment in Bengaluru. It raised $800,000 from Accel in 2008 and later Tiger Global became an investor in 2010, the US-based hedge fund then doubled down in 2015 cumulatively investing around $1.2 billion in the e-commerce company and earning $3.5 billion in total.

A timeline of key events at Flipkart

After several rounds of fundraising and billion of dollars in capital, the Bansal duo then delivered one of the biggest exits in the Indian startups space. The exits for Bansal, Accel and Tiger Global will also be a vindication of sorts for several founders in the world's third-largest startup ecosystem as the bumper returns have come in a market where exits are few and far between. In fact, Binny Bansal also co-founded xto10x, a startup accelerator which helps new-age companies scale.