Earlier, Softbank’s plan was to sell Snapdeal to the Bansals and pick up a majority stake in Flipkart. But after the Bahl-led company rejected the offer, the Japanese investor decided to independently pursue its goal.
Softbank pours $2.5 billion into Flipkart
The Japan-based MNC’s technology-focused firm Vision Fund has invested around $2.5-$2.6 billion in the Indian ecommerce leader. To understand how huge the investment is, compare it with the $950 million that Snapdeal was going to get in exchange of completely merging with Flipkart. This investment has made Softbank one of the largest investors in Flipkart.
The 2.5 billion would be utilized to compete against Amazon India and would also allow Flipkart’s selected investors like Tiger Global to partially exit. And Softbank would benefit from the majority stake it now owns in the current Indian ecommerce leader. After adding the $1.4 billion Flipkart received from Tencent, eBay and Microsoft in April 2017 to the latest funds, the etailer has $4 billion of cash on its balance sheet
An elated Sachin Bansal tweeted:
In a joint statement, Flipkart’s co-founders Sachin and Binny Bansal said, “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.”
Want to support clear winners in India, says Softbank’s CEO Masayoshi Son
Softbank had invested $1.4 billion in Vijay Shekhar Sharma-led Paytm in May 2017. The investor is also interested in investing in other Indian ecommerce companies across verticals such as marketplace, grocery and others. The company’s CEO Masayoshi Son thinks that India is a place where he can build a company like Alibaba.
“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,” said Son.