Flipkart investors sell stakes

Investment firms Helion Venture Partners and IDG Ventures India have sold stakes in Flipkart in deals that value India’s largest online retailer at Rs 77,000 crores. Helion, which got a stake in the Bangalore-based company by virtue of its investment in online electronics retailer LetsBuy that was acquired by Flipkart in 2012, has sold its entire stake of 0.2 per cent, estimated to be worth Rs 156 crores. IDG Ventures, which entered Flipkart through fashion portal Myntra that was bought last year, has shed a portion of its holdings.

The stake sales are happening at a time when funding cycles are expected to taper off in India’s red hot e-commerce sector. This is an opportune time for investors, especially those who have invested in e-commerce companies for more than four to five years, to start offloading. That is the trigger for the secondary sales. Moreover, listings are not easy and that also triggers secondary exits.

Flipkart saw its valuation leapfrog from Rs 16,120 crores in May 2014 to about Rs 68,000 crores by December. At present, the largest investors in Flipkart include Tiger Global, which holds majority stake in the company, and Accel Partners, its first venture investor, which owns about 20 per cent. Other investors in the company include South Africa’s Naspers, Singapore’s GIC and the Qatar Investment Authority.

Typically, in the start-up sector, the largest investors continue to increase their stakes in category leaders while smaller investors sell out as the stakes get higher.