SoftBank Vision Fund has bought stake worth at least $2.6 billion in Flipkart Ltd, in a deal that provides a part exit to some of the e-commerce company’s investors, boosts the ability of India’s largest internet firm to take on arch-rival Amazon India, and gives SoftBank a piece of India’s most valuable start-up, reported Mint.
The latest round of funding takes Flipkart’s cash reserves to more than $4 billion. Flipkart didn’t disclose the amount, but SoftBank invested roughly $1.4 billion directly in Flipkart, three people familiar with the matter said on condition of anonymity.
SoftBank will also buy Flipkart shares worth $1.2-1.4 billion from Tiger Global Management, Accel Partners, IDG Ventures and Flipkart co-founders Sachin and Binny Bansal, among others, the people cited above said. Flipkart’s largest investor, Tiger Global—whose representative Kalyan Krishnamurthy is the company’s CEO—will get a majority of the $1.2-1.4 billion from SoftBank, the people said.
The SoftBank investment comes on the heels of Flipkart’s proposed takeover of Snapdeal, the Japanese investor’s portfolio company, collapsed.
“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,” Binny Bansal and Sachin Bansal said in a joint statement.
“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 Masayoshi Son, chairman and CEO of SoftBank Group Corp.
Goldman Sachs served as financial advisor and Khaitan & Co. and Gunderson Dettmer served as legal advisors to Flipkart in the SoftBank deal. Citi served as financial advisor and AZB & Partners served as legal advisor to the SoftBank Vision Fund.