Google, Amazon In Race To Invest In Future Retail; Berkshire Hathaway-Paytm Deal Confirmed!

 

Retail shakeup is clearly happening in India, and we have got yet another solid evidence of the same.

Kishore Biyani led Future Group is right now under hot pursuit from Alibaba, Google, and Amazon, as they wish to invest in the company, and grab a pie of the offline retail sector.

On the other hand, Berkshire Hathaway has confirmed that they are indeed investing in Paytm.

What will be the future of retail in India?

Amazon Wants To Invest in Future Group!

As per some unconfirmed reports coming in, Amazon is all set to invest $600 to $700 million in Future Group, and claim 10-15% share of the company.

As per the reports, Kishore Biyani has made several trips to Seattle and Bentonville in order to have talks with both Amazon and Walmart.

If we believe an unnamed source, then the deal has been finalized between Amazon and Future Retail.

That source even claimed that a term sheet has been signed, but Future Group has refused to acknowledge it.

In case Amazon is able to acquire a stake in Future Retail, then it will help them to bypass FDI rules, and have get involved in food retail directly.

In the month of February, we had reported that Future Group can enter into a strategic partnership with Amazon or Alibaba. The same rumors were doing the rounds in May as well.

Google-Alibaba Can Join Hands For Investing In Future Group?

Meanwhile another set of reports claim that Google and Alibaba are forming a consortium, as they both want to invest in Future Group.

The partnership is slowly developing between Google and Paytm Mall, where Alibaba is a majority stakeholder.

As per the reports, the combined forces of Paytm Mall and Google can invest between Rs 3000 to Rs 4000 crore in Future Group, and acquire 10-15% stake, just like Amazon.

It is still not clear whom will Kishore Biyani finally choose: Amazon or Alibaba-Google.

Future Group has 1035 stores as of now, where 500 million customers walk-in in a year. Collectively, they hold 14.5 million square feet of retail space, and during FY18, they churned out Rs 18,200 crore worth of revenues.

They have a market cap of approximately Rs 26,000 crore.

Walmart-Paytm Deal Is Confirmed!

Meanwhile, the much-anticipated investment of Walmart in Paytm has now been confirmed.

We had reported about this possible investment yesterday.

However, we had speculated that Warren Buffett will be directly involved in the deal, whereas now, it has been revealed that Berkshire Hathaway will invest in One97 Communications, which owns Paytm.

Confirming the news, Vijay Shekhar Sharma,  founder and chief executive officer of Paytm said, “Berkshire’s experience in financial services, and long-term investment horizon, is going to be a huge advantage in Paytm’s journey of bringing 500 million Indians to the mainstream economy through financial inclusion.”

As we had reported, Todd Combs, investment manager at Berkshire Hathaway has joined the Board at Paytm.

We will keep you updated, as we receive more updates.