SoftBank's Vision Fund invests $2.5 billion in Flipkart: sources
A tech fund backed by Japan`s SoftBank has invested close to $2.5 billion in leading Indian online marketplace Flipkart through primary and secondary share purchases, two sources familiar with the matter said on Thursday.
The investment by the SoftBank Vision Fund gives India`s largest homegrown e-commerce player additional firepower to compete with U.S. e-commerce giant Amazon.com which has said it will invest $5 billion in India.
Together with the $1.4 billion Flipkart raised earlier this year from China`s Tencent, online marketplace eBay and software giant Microsoft, it will now have more than $4 billion of cash, Bengaluru headquartered Flipkart said in a statement.
The SoftBank fund becomes one of Flipkart`s biggest shareholders after this investment, which is part of the same funding round that had raised the $1.4 billion. Flipkart had said in April it had a valuation of $11.6 billion after the funding round from Tencent and others.
Flipkart did not give details on the size of the investment or which shareholders had sold stock in the secondary sale. The major investors in Flipkart prior to the latest round were U.S. hedge fund Tiger Global, South Africa`s Naspers and Indian venture capital firm Accel Partners, among others.
The deal comes just 10 days after SoftBank`s attempts to forge a deal between Flipkart and its smaller rival Snapdeal fell apart following months of negotiations. SoftBank has long held a significant stake in Snapdeal, which has lost market share to both Flipkart and Amazon in India.
The Japanese solar-to-tech conglomerate had been trying to engineer an all-stock transaction between the two rivals for months, as a means to secure a sizeable stake in Flipkart and thwart Amazon`s ambitions in India.
"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," SoftBank Chief Executive Masayoshi Son said in the statement.
(This article has not been edited by Zeebiz editorial team and is auto-generated from an agency feed.)
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