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Walmart outfoxes Amazon to buy Indian e-commerce giant

Illustration: Lazaro Gamio/Axios

Walmart made it official this morning, announcing that it will pay $16 billion for a 77% stake in Indian e-commerce leader Flipkart. Included in that total is a reported $3 billion investment from Google's parent company, Alphabet.

Why it matters: Amazon just suffered the sort of defeat that is usually reserved for physical retailers.

For Flipkart, this provides the company with a permanent capital structure without sacrificing managerial independence. It still expects to do an IPO — think Walmex 2.0 — but that runway has been significantly extended.

For India's startup ecosystem, this could be a game changer. Not only in terms of inspiring other prospective entrepreneurs, but also in the sheer amount of cash that Flipkart employees will have to invest in their own startups or in someone else's.

More notes on the deal:

  • Initial confirmation came via SoftBank CEO Masayoshi Son, during an earnings presentation. The official Walmart press release appeared hours later.
  • Word is that all Flipkart investors had the opportunity to sell their entire stake, which SoftBank took advantage of. Backers that are retaining at least some of their position include Accel, Microsoft, Tencent and Tiger Global.
  • Walmart's early aggressiveness appears to have been key to its win, although Flipkart also had concerns that an Amazon tie-up could face antitrust scrutiny.