SoftBank mulls $2 b investment in Flipkart

Japanese technology and investment conglomerate SoftBank is planning to infuse about $2 billion in the Bengaluru-based online retailer Flipkart.

According to sources familiar with the development, SoftBank is looking at investing about $1.5 billion to $2 billion after its move to merge rival etailer Snapdeal with itself failed.

SoftBank, through SoftBank Vision Fund, wants to make investment in Flipkart so that it can play an active role in the Indian ecommerce ecosystem. For Flipkart, the funding would provide it with more arsenal to compete with the US-based Amazon.

Besides cab aggregator Ola, SoftBank also invested in Snapdeal and committed investments worth $10 billion in India since 2014. SoftBank invested $1.4 billion (over Rs 9,079 crore) in Paytm May, 2017.

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

Flipkart succeeded in raising $1.4 billion during the 11th round of investment from Microsoft, eBay and Tencent at a valuation of $11.6 billion in April this year. It is lower than its peak valuation of $15 billion, when it raised $550 million in 2015 from some of its earlier investors. It is further increasing its firepower to enhance its capabilities to compete with Amazon greater plans for India. Flipkart’s investors include GIC, DST Global, Tiger Global Management, Naspers, Accel Partners, Morgan Stanley Investment Management, Baillie Gifford and Steadview Capital.

eBay merger completed

Flipkart said it has completed the merger with eBay India’s operations. With this, eBay.in will now be a Flipkart Group company. In April the merger plan when it raised $1.4 billion from eBay, Tencent and Microsoft. In exchange of an equity stake in Flipkart, eBay had made a cash investment of $500 million and sold its eBay.in business to Flipkart.