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SoftBank's $2.5 billion ammo to fire up Flipkart 2.0

12 August, 2017, 00:17 | Author: Paula Vaughn
  • SoftBank boss Masayoshi Son and Tiger Global Management’s Lee Fixel

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.

Flipkart, which raised US$1.4bil (RM6bil) in April from China's Tencent, online marketplace eBay and software giant Microsoft, will now have more than US$4bil (RM17.1bil) of cash, the Bengaluru-based company said in a statement on Thursday.

Early on, the hedge fund that had been invested by the Tiger Global in the Flipkart, it is been expected that they have received a partial exit following this investment. With razor-sharp execution, we must continue to transform commerce in India through technology and India-specific innovations.

Softbank has made the investment through Vision Fund, its venture fund investing in technology companies.

"After this financing round, Flipkart will have in excess of $4 billion of cash on balance sheet". "Harish HV, partner, Grant Thorton, believes the infusion is a vote of confidence for the Indian e-commerce industry".

"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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With this investment, Flipkart has now raised approximately $8 billion via 14 rounds.

Flipkart co-founders Binny Bansal and Sachin Bansal called the new funding from Soft Bank as a monumental deal for the company and India while saying that very few economies in the world attract such massive invest from top-tier investors. In January 2017, it was reported that SoftBank Capital, will facilitate its investments in India via its $100 Bn tech focussed fund, Vision Fund. SoftBank has an India portfolio spanning e-commerce, ride sharing, digital payments, hospitality, clean energy and telecommunications, which is valued at over $6 billion.

Flipkart, which started by selling books on the Internet in 2007, was struggling to raise money until previous year, hobbled by a tough private funding environment and shrinking valuations.

Earlier this year, the Japanese telecom major had written off $1 billion in Snapdeal, after it failed to grow and compete with Flipkart and Amazon. SoftBank is one of the lead investors in Snapdeal, though the day after Snapdeal announced that it terminated talks with Flipkart, it emerged that SoftBank was looking to invest in Flipkart.

Amazon, on the other hand, has been bullish on its plans for India.

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