With new investment, SoftBank now among largest stakeholders in Flipkart

Sachin Bansal (L) Binny Bansal (R)

E-commerce market leader Flipkart has received an undisclosed amount from SoftBank Vision Fund, the world’s largest technology-focussed investment fund. A press statement from Flipkart claims that this is the biggest ever private investment in an Indian technology company. Flipkart now has more than $4 billion in its kitty.

The investment is part of the previously announced financing round, where Flipkart had raised capital from Tencent, eBay and Microsoft. SoftBank Vision Fund joins them in a mix of primary and secondary capital.

Binny Bansal and Sachin Bansal, Co-Founders of Flipkart, said in a statement: “This is a monumental deal for Flipkart and India. Very few economies globally attract such overwhelming interest from top-tier investors. It is recognition of India’s unparalleled potential to become a leader in technology and e-commerce on a massive scale. 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.”

Son rising in India

Even after the much-hyped Flipkart-Snapdeal merger (which SoftBank had pushed for) fell through, Masayoshi Son, Founder and Chairman and CEO of SoftBank Group Corp. was open about supporting Flipkart.

“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 in the statement.

Also read: Snapdeal wants no deal with Flipkart

Among SoftBank’s major bets in India are Ola, OYO Rooms, and Paytm. Snapdeal, which was among their initial protégées, has decided to scale down to Snapdeal 2.0, after its talks for acquisition by Flipkart hit a wall after almost six months of negotiations.

The Vision Fund enables long-term, large-scale investments to fund growth in the technology sector, investing up to $100 billion over the next five years. The fund will invest through minority stake, majority stake and public equity investments of $100 million or more in the next 10 years, said the press statement.

Flipkart’s next big move

In its battle against global mammoth Amazon, the backing by two of the most prominent global investors – Tiger Global Management and now SoftBank – gives Flipkart a major boost in terms of improving their technology and strategising.

Also read: The age of Flipkart

With Paytm Mall not making any waves yet, and Snapdeal practically out of the scene, now the battlefield is only for Flipkart and Amazon. Aiming for profitability, Flipkart has been focussing on new categories like grocery and furniture as well their own private label ‘Smartbuy’. Also, the company announced its private brand ‘Billion.’

According to a report by Forrester Research, online retail in India will annually grow at 31.2 percent, between 2016 and 2021, and will hit $64 billion in 2021. Obviously, there is enough space for multiple players. But the Flipkart Group – which includes fashion portals Myntra and Jabong, digital wallet PhonePe, and logistics arm Ekart as well as the recently acquired C2C platform eBay.in – has a clear advantage.


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