Following the infusion, Softbank has become one of the largest shareholders in the domestic etailer.
Bengaluru: Just days after the Flipkart-Snapdeal merger fell through, Japan’s SoftBank announced that it has invested over $2.5 billion— a mix of primary and secondary capital—in the e-commerce company. With this massive infusion, Softbank has become one of Flipkart’s largest shareholders.
After the current financing round wherein Softbank’s Vision Fund joins Tencent, eBay and Microsoft, Flipkart will have an excess cash of over $4 billion on its balance sheet, according to a company statement. The e-commerce player will be seen utilising the funds to give impetus to its mission to transform India.
“This is a monumental deal for Flipkart and India. Very few economies globally attract such overwhelming interest from top-tier investors. It is recognition of India’s unparalleled potential to become a leader in technology and e-commerce on a massive scale. SoftBank’s proven track record of partnering with transformative technology leaders has earned it the reputation of being a visionary investor. We’re excited to welcome the Vision Fund as a long-term partner as we continue to build our business with a focus on serving the needs of all Indians, and driving the next phase of technology adoption in India,” Flipkart co-founder Sachin Bansal said.
The investment will enable Flipkart to take the fight to its rival Amazon. “India is a land of vast opportunity. We want to support innovative companies that are clear winners in India because they are best positioned to leverage technology and help people lead better lives. As the pioneers in Indian e-commerce, Flipkart is doing that every day,” SoftBank chairman and CEO Masayoshi Son said.
The Indian e-commerce market is expected to grow at a five-year CAGR in excess of 30 percent because of the country’s thriving internet market with nearly 500 million internet users, according to a study. The e-commerce company aims to take advantage of the rapidly growing internet market, while at the same time, giving a stiff competition to its rival companies.