Investing

SoftBank Vision Fund may invest up to $2 b in Flipkart

Funding could boost the e-commerce firm’s coffers to compete with Amazon


New Delhi, August 1:  

Japanese conglomerate SoftBank is looking at investing about $2 billion in home-grown e-commerce major Flipkart, according to industry sources.

SoftBank, through its Vision Fund, is in discussions with Flipkart to invest $1.5-2 billion, two people aware of the development said. They did not wish to be named as the discussions are still going on.

This assumes significance as SoftBank-backed Snapdeal had on Monday called off merger talks with Flipkart. While Snapdeal did not name the Bengaluru-based company, the merger negotiations were widely reported over the past five months.

It was also reported that SoftBank was looking at picking up equity in Flipkart.

With the talks between Snapdeal and Flipkart collapsing, SoftBank could now still go ahead and invest in Flipkart, the sources added.

SoftBank, which has investments in Indian start-ups such as Snapdeal and cab aggregator Ola, had committed investments worth $10 billion in India in 2014. In May this year, SoftBank pumped in $1.4 billion (over ₹9,079 crore) in digital payments platform Paytm.

When contacted, a SoftBank spokesperson said: “SoftBank Vision Fund independently evaluates each investment on its own merit.” Flipkart did not respond to e-mailed queries.

For the long haul

SoftBank Vision Fund, founded by SoftBank Group Chairman Masayoshi Son, operates as a separate entity. It also has participants such as Apple, Foxconn and Public Investment Fund of the Kingdom of Saudi Arabia.

According to a statement issued by SoftBank in May, the fund will target “meaningful, long-term” investments in companies that seek to enable the next age of innovation.

Facing the rival

For Flipkart, the funding will provide more arsenal to compete with the US-based Amazon.

The two players have been locked in an intense battle for leadership in the Indian market and have been pumping in millions of dollars to strengthen infrastructure as well as bring more sellers and buyers online.

In April, Flipkart had raised $1.4 billion from Microsoft, eBay and Tencent at a valuation of $11.6 billion.

Amazon, on its part, has pumped in close to $600 million across various units in India since January this year.

(This article was published on August 1, 2017)

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