Deal Dive: Most secondary sales in venture won’t look like Tiger’s Flipkart deal

Just a few months in the past, it regarded like all of the items had fallen into place for a scorching secondaries summer time: Buyers had been coming again to market, some firms and sellers had been getting determined, and the bid-ask unfold — the distinction of what patrons are prepared to pay and the value sellers are setting — was tightening.

Tiger Global’s latest secondary deal, in which it bought its stake in Indian e-commerce big Flipkart to Walmart for $1.4 billion, reveals that the market has began shifting. But this transaction shouldn’t be taken as a bellwether of what’s forward for venture’s secondary market this yr.

To recap, Walmart is already a majority shareholder in Flipkart, and this new deal valued the net market at $35 billion, a minor 7% valuation haircut from its final publicly introduced valuation of $37.6 billion.

Tiger Global had invested a complete of $1.2 billion in Flipkart over a number of funding rounds since 2010, in keeping with TechCrunch reporting. It bought off a bunch of its shares over time to internet a collective $3.5 billion return, which isn’t a nasty payout by any requirements.

Tiger Global declined to remark. A Walmart spokesperson mentioned, “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.”

Sure, one might argue — rightly so — that this deal is a little bit outdoors the venture market, contemplating Flipkart has been majorly owned by Walmart since 2018. But, Tiger Global has been purchasing round a number of its venture stakes, too — which might embody firms like Brex, Chime and Databricks — and I believe it’s good to mull over why the funding agency doubtless won’t get an analogous deal for its venture stakes.