US-based retail giant Walmart Inc. is the process of negotiations and discussions with the Tata group to collaborate on Tata’s upcoming “Super App.” Walmart is willing to invest up to $ 25 billion in the app to acquire a major stake in the venture. Tata group is looking to expand its presence in the digital space and a tie-up with Walmart which holds a major stake in one the country’s top online shopping portal will be beneficial to both the companies.
A source inside to the deal confirmed, “Tata group is in talks with Walmart for a deal entailing a strategic investment by Walmart in the super app platform business. The Walmart investment could touch $20-25 billion eventually for a large stake in the proposed super app to be hosted under a Tata Sons subsidiary.” It is assumed that negotiations with Walmart are going in the right direction as the company has hired Goldman Sachs as its banker for the proceedings.
What is this Super App?
The ‘Super App’ could be a joint venture between the Tata Group and Walmart that will bring together all the services and products of both the companies under a single roof. This all-in-one app will offer the customers commodities like groceries, electronics, automobiles, apparel, and services like hotels to build an online network that will rival the likes of Reliance and Amazon.
This app could potentially be launched in just a few months and may start offering its services from December this year or coming January. The entire portfolio of the services and products is not yet released but with Tata Group running multiple businesses in India, we can expect a wide array of categories on the app.
What does this mean for Flipkart?
Walmart owns a 66 percent stake in Flipkart for which it paid a whopping $16 billion. If this collaboration of Tata and Walmart comes into action then this will leave the Flipkart behind to become the largest retail acquisition deal in the country. One insider source to the deal revealed that the app could combine Flipkart’s services with Tata’s retail business. There are also possibilities of Flipkart getting backup support from the Tata group after the deal.
Tata is looking for other potential investors as well
Along with the current negotiations with the multi-national retail chain, the Tata group is also looking into other interested parties. As the deal is in its early stages, the names of the other investing companies are yet to be revealed. However, this wouldn’t be the first time that an Indian company that seeks any capital from firms outside. Earlier this year, Mukesh Ambani owned Reliance Jio Industries raised around $ 20 billion by selling its stake to various investors like Facebook, Silver Lake, Vistas, KKR, and Abu Dhabi Investment Authority.
There have been no official statements from either Walmart Inc. or Tata group so far regarding the deal. But we hope that as we approach the launch of the app we will get the complete details of the app and Walmart’s involvement in it.