SoftBank fund pumps record $2.5bn into India's Flipkart

Paterniano Del Favero
Agosto 10, 2017

Softbank has invested in Flipkart through its $100 billion technology-focused Vision Fund, the Indian ecommerce company announced on Thursday.

According to official sources, the funding is a mix of primary and secondary capital led by SoftBank Vision Fund, the world's largest technology-focused investment fund. The investment is a part of the earlier $1.4 Bn round from Tencent, eBay, and Microsoft.

In a statement, last week, Softbank had said that it respected Snapdeal's decision to pursue an independent strategy and not merge into its arch rival Flipkart.

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As a result, SoftBank will now become the largest shareholder in Flipkart, just days after Snapdeal founders chose to terminate merger talks with the Bangalore-based company. The most anticipated investment of the year has finally come through. Softbank had pushed for selling Snapdeal, in which it holds 33% equity stake, to Flipkart for $1 billion, and was believed to be mulling investing a similar amount in the combined entity in return.

The rapid decline in Snapdeal's valuation, with no recovery in sight, seemed to have prompted Softbank to cut its losses and exit the investment while there is still time, in favour of buying into a larger player in the industry with a stronger foothold, and perhaps, better growth prospects in an increasingly competitive market.

In a joint statement issued to media, Flipkart founders, Sachin Bansal and Binny Bansal termed the deal as monumental for Flipkart and India. "As the pioneers in Indian e-commerce, Flipkart is doing that every day", Son said in a statement. It is recognition of India's unparalleled potential to become a leader in technology and e-commerce on a massive scale.

"India is a land of vast opportunity", said Masayoshi Son, Founder, Chairman, and CEO of SoftBank Group.

With this investment, Flipkart now has over ₹25,000 crores in cash reserves. Very few economies globally attract such overwhelming interest from top-tier investors. SoftBank's proven track record of partnering with transformative technology leaders has earned it the reputation of being a visionary investor.

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