Flipkart’s two earliest backers — venture capital fund Accel Partners and New York-based investment firm Tiger Global — are in talks to exit the e-commerce company by selling their remaining stakes to its parent Walmart for around $1.5 billion, according to our sources.
Also in this letter:
■ Google makes several billing changes for Android and Play Store in India
■ Tech wants tax cuts, APA timelines in budget
■ New rules of influence will increase transparency but also increase costs: DigitalROI
Exclusive: Accel and Tiger Global in talks to exit Flipkart
Accel Partners and Tiger Global, two of Flipkart’s earliest backers, are in talks to sell their remaining stakes in the e-commerce company — which make up about 5% of the business — to its parent company Walmart, several have told us. people familiar with the development.
The US retail giant could shell out around $1.5 billion for the stock purchase, they added.
Details: While Accel owns just over 1% of Flipkart, Tiger Global owns around 4% of the company. Once a deal is finalized, Walmart’s stake will increase from the current 72%.
“They (Accel and Tiger) want to sell and get out now completely. Discussions are progressing and the transaction will be completed in due course,” the interviewees said. “This is an important moment for Accel and Tiger Global.”
Reason for leaving: Both investment companies are leaving Flipkart largely because they need to return money to their limited partners or sponsors from funds that are nearing the end of their maturity cycle.
Walmart’s move to buy them comes shortly after its $1 billion investment in payments company PhonePe through primary and secondary infusions.
Return on investment: For Accel, which first invested in Flipkart in 2009, the latest deal is expected to bring in around $350 million. From an initial $1 million, Accel has over time invested approximately $100 million in total in the business. The venture capital fund had posted returns of around $1 billion when it sold part of its stake when Walmart acquired Flipkart for $16 billion in 2018.
Tiger Global’s exit from Flipkart will also bring a significant payout and mark the culmination of an investment round sparked by Lee Fixel, a former partner at the New York-based company who led its investments in Flipkart.
Google makes several changes to Android and Play Store billing in India
On Wednesday evening, Google announced several key changes to the way it runs the Android operating system and the Google Play Store in India, to comply with two rulings by India’s antitrust watchdog.
The changes came a day before the January 26 deadline set by the Supreme Court for Google to comply.
Changes: Google said it would introduce an original equipment manufacturer (OEM) licensing model, under which device makers could license individual Google apps to be pre-installed on their devices.
The tech giant also said that Indian users will in future be able to choose their default search engine through a choice screen that will start appearing when a user sets up a new Android smartphone or tablet.
Yes, but: The company said it “will continue to respectfully appeal certain aspects of ICC rulings and uphold the fundamental principles of openness, expanding user choice, transparency, and maintaining safety and security that have served the interests of the wider ecosystem”.
Catch up fast: On October 20, India’s Competition Commission (ICC) fined Google Rs 1,337.76 crore and asked it to make several changes to its policies in the Android marketplace to prevent abuse of its dominant position.
A week later, the CCI imposed another Rs 936.44 crore on Google and demanded that it make several changes to its Google Play Store billing policies.
In December, Google appealed to the National Company Law Appellate Tribunal (NCLAT) against the Android order. But the NCLAT refused to grant him a provisional suspension.
In January, Google went to the Supreme Court, but the court also denied the company interim relief, while extending the deadline for Google to comply to January 26.
Tech wants tax cuts and ABS timelines in the budget
IT and tech companies have called on the government to cut taxes, promote startups and increase the ease of doing business in the upcoming budget. Computer industry lobby group Nasscom has urged the government to prescribe deadlines for the closing of advance pricing agreements (APAs).
Requests: “Government should also notify safe harbor rules for entities with turnover up to Rs 1,000 crore and reduce tax rate for IT services industry and IT services to 15% from 17% to 24%,” said Ashish Aggarwal, vice president. President and Chief Public Policy Officer, Nasscom.
The government should streamline APPs, Mutual Agreement Procedures (MAPs), regulations and benchmarking, added PN Sudarshan, Partner and TMT Industry Leader, Deloitte.
The Software Vendors Association has suggested that the government set up an alternative dispute resolution body made up of revenue and industry members, instead of a dispute resolution committee.
New rules of influence will increase transparency but also increase costs: DigitalROI
New guidelines for social media influencers to regulate promotions could lead to higher costs for advertisers, as they may need to spend more to create compliant content, according to DigitalROI, a social media and marketing company. influence.
Catch up fast: Last week, the government announced endorsement guidelines for celebrities and social media influencers, making it mandatory to disclose benefits for promoting goods or services on social media.
“This includes not only benefits and incentives, but also monetary or other compensation, travel or hotel stays, media barters, coverage and rewards, free products with or without conditions, discounts, gifts and any family or personal or professional relationship,” the union said. The Department of Consumer Affairs said in a statement.
These disclosures should be prominently displayed with terms such as “advertising”, “sponsored” or “paid promotion”, he added. Failure to do so will result in a fine of up to Rs 50 lakh.
Estimate: Vikas Mangla, Founder of DigitalROI, said: “Consumers may become more aware of when a recommendation is sponsored, which could lead to increased skepticism about the authenticity of the recommendation. Advertisers may need to be more transparent in their dealings with influencers and other endorsers. , which could lead to increased monitoring of these relationships.
It cost PhonePe Rs 8,000 crore to move to India: CEO Sameer Nigam
PhonePe co-founder and CEO Sameer Nigam said on Wednesday that the company paid almost Rs 8,000 crore in taxes to the Indian government to move its home from Singapore to India.
Indian law poses challenges: Nigam said about 20 unicorn startups and their investors asked the company how the process went, saying they were also interested in moving their headquarters to India. PhonePe completed its transfer from Singapore to India in October 2022.
During a YouTube Live session with PhonePe co-founder and chief technology officer Rahul Chari, Nigam said Indian law poses many challenges for startups looking to set up in India, such as a capital gains tax. for shareholders and investors, the reset of the vesting period for employees’ shares. options (Esops) and the inability to offset losses.
“Our investors paid nearly Rs 8,000 crore in taxes just to allow us to come back to India,” Nigam said.
We reported on January 4 that the government would likely earn up to $1 billion in taxes from US retail giant Walmart and other PhonePe shareholders as part of its transfer to India.
Other Top Stories by our journalists
Two ShareChat co-founders are stepping down: ShareChat co-founders Farid Ahsan and Bhanu Pratap Singh will step down from active roles on the vernacular social media platform they launched eight years ago, co-founder and CEO Ankush Sachdeva told staff in an email. internal email. Ahsan was chief operating officer of ShareChat while Singh was chief technology officer.
Happiest Minds acquires IT company SMI for Rs 111 crore: Happiest Minds Technologies has signed definitive agreements to acquire 100% of Madurai-based IT services company Sri Mookambika Infosolutions (SMI) through a combination of initial and deferred equity consideration totaling Rs 111 crore. With more than 400 overseas-based employees, SMI has annual revenue of $9 million, according to an exchange filing.
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