A tech fund supported by SoftBank of Japan has spent almost $2.5 Billion in Flipkart, top online marketplace of India. It did this via secondary and primary share acquirements, 2 sources having a deep knowledge of this matter claimed to the media this week.
The spending by the SoftBank Vision Fund offers largest homegrown e-commerce contender of India additional ammunition to fight with Amazon.com, the U.S. e-commerce giant. Amazon has claimed that it will spend $5 Billion in India.
Along with the $1.4 Billion Flipkart lifted previously this year from Tencent of China, software giant Microsoft, and online marketplace eBay, it will now have over $4 Billion of cash. This data was given by the Bengaluru-based Flipkart in a statement to the media.
The fund from SoftBank turns out to be one of biggest shareholders of Flipkart after this investment. The investment is fraction of the similar round of funding that had lifted the $1.4 Billion. Flipkart had claimed in April that it had a value of $11.6 Billion post the round of funding from others including Tencent.
Flipkart did not give information on which stakeholders had traded shares in the secondary sale or the bulk of the investment. The main sponsors in Flipkart before the new round were Tiger Global, the U.S. hedge fund; Naspers of South Africa; and Accel Partners, the Indian venture capital firm.
The deal arrives just 10 Days post the attempts of SoftBank to fake a deal between Flipkart and Snapdeal, its smaller rival, fell away from each other after long negotiations. SoftBank has long seized an important share in Snapdeal, which has lost share of market to both Amazon and Flipkart in India.
The Japanese corporation had been making an attempt to persuade an all-stock payment between the 2 competitors for months, as a means to lock a sizeable share in Flipkart and spoil ambitions of Amazon in the country.
“We need to support ground-breaking firms that are obvious winners in the country since they are top positioned to influence technology and assist people get better lives,” Masayoshi Son, Chief Executive of SoftBank, claimed in the statement.