With the Walmart deal, however Sachin Bansal stands to attain his billionaire status again, as he will offload his entire 5.5% stake in the company to Walmart, earning him about $1 billion, Bloomberg reported.
Flipkart which gained as much as 50 percent on a YoY growth, will still be lead by their CEO, Binny Bansal, as the other founders step down from the once small startup.
Hundreds of Flipkart employees will find themselves to be newly minted millionaires, thanks to the $500 million the company has reserved for ESOP (Employee stock options) payouts.
What's in it for Walmart?
Walmart CEO Doug McMillon said on Thursday that he sees cash-and-carry and online retailing as two different types of businesses and predicted that India would have more than two major players vying for a share of its rapidly expanding e-commerce market.
Flipkart and Amazon have been in fierce competition ever since Amazon entered the Indian market in 2013, and Walmart's expertise is likely to give Flipkart a leg up in the battle.
"Flipkart's scale of business will grow immensely post the deal with Walmart as the USA retailer has deep pockets and better experience in handling global market", said Nrusingha Charan Barik, who is in charge of the delivery partner of Flipkart in Odisha.
Shares of Walmart Inc. dropped more than 3 per cent Wednesday as investors anxious about the investment hurting profits.
"A company like Walmart shown interest only after they smelled huge business opportunities in the Indian e-commerce market through Flipkart". The remainder of the online shopping company will be owned by its existing investors, including Microsoft, Flipkart co-founder Binny Bansal, Chinese conglomerate Tencent Holdings, and hedge fund Tiger Global Management.
But when Amazon and Walmart duel for control of Indian retail market in coming days, it would be hard for the Modi government to maintain status quo on the policy front. While the deal marks the biggest triumph for an Indian start-up, it also means that for the foreseeable future, the online retail business in India will be controlled firmly by two large American firms-Walmart and Amazon. An official announcement is coming soon, he said.
Through the deal, Flipkart will leverage Walmart's omni-channel retail expertise, grocery and general merchandise supply-chain knowledge and financial strength, while its technology, customer insights and innovative culture will benefit the United States retail giant in India and elsewhere. "Investors are questioning why Walmart is investing outside the U.S. market (~2/3 of total revenue and ~75% of total EBIT) at a time when Amazon is stepping up its infrastructure/distribution related investments", Gutman wrote.