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Walmart investing $153 million in Rakuten for a 1% stake

Walmart to invest $153M in Rakuten's share sale

American retail giant Walmart (NYSE: WMT) is investing $153 million in Japanese e-commerce platform Rakuten in a share sale deal. 

In an official statement, Walmart says it will take a 0.9% stake in Rakuten as the Japanese outlet continues to strengthen its ecosystem on a global scale. 

The deal comes almost three years after Rakuten and Walmart entered an alliance to reach users in Japan and the United States. As part of the partnership, the two firms launched the Rakuten Ichiba digital shopping mall that features U.S.-branded products.

Walmart’s funding injection is part of the $2.2 billion Rakuten is raising to help compete with American tech giants.

According to Walmart, the investment will help the company reap from future growth in the changing global retail ecosystem.

Judith McKenna, President and CEO of Walmart International commented

“Around the world, we’re making strategic equity investments to enable Walmart to benefit from future growth in a rapidly changing global retail environment. We have known and worked with Rakuten for a long time, and in many ways, their ambitious journey to develop a world-class e-Commerce ecosystem mirrors our own.”

Walmart’s funding injection is part of the $2.2 billion Rakuten is raising to help compete with American tech giants. Rakuten is seeking to get a market share of Amazon, Apple, Facebook, and Google. 

Rakuten’s new largest shareholder

Other investors include logistics firm Japan Post with a stake of 8.3% and tech company Tencent with a 3.6% stake. The share sale now makes the Japan Post Holdings the biggest shareholder in Rakuten outside the founding Mikitani family 

Rakuten aims to leverage on the deal to improve the corporate value and shareholder value.  This is after the firm’s 2020 revenue grew by about 15% in 2020.

Hiroshi Mikitani, Rakuten Chairman and CEO, states that:

“These new investments in Rakuten indicate both high expectations for the growth and impact of the Rakuten Ecosystem with the mobile service at its core, as well as great potential for further collaboration with leading companies from the world’s three leading economies.”

Rakuten currently operates over 70 businesses with an ecosystem consisting of various operations.

Besides e-commerce, the company has ventured into internet services, travel, digital content, and FinTech services. 

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