Published Date : Aug 11, 2017
Indian ecommerce giant Flipkart, which has been battling dogged competition from deep-pocketed international arch-rival Amazon, has received another shot in the arm. Recently, it procured about $2.5 billion in funding from Japan's SoftBank Group which will arm it better to thwart Amazon’s ambition to dominate the market.
SoftBank's Vision Fund, the largest private equity fund in the world, is slated to invest the amount through purchase of primary and secondary shares, revealed sources. Flipkart had earlier managed to raise $1.4 billion from China's Tencent, software behemoth Microsoft, and online marketplace eBay. The Bengaluru-headquartered company is now armed with over $4 billion of cash.
SoftBank Pins Hope on Indian Ecommerce Sector
Just about 10 days earlier, SoftBank's attempts to strike a deal between Flipkart and smaller rival Snapdeal fell flat after many rounds of negotiations. The recent success is not only a boon for Flipkart, but also shows a revival global investors' faith in the Indian e-tailing sector on account of big players cutting down on hefty discounts to save cash.
Flipkart, however, has not yet revealed its new valuation after the new round of investment. The last time it disclosed its valuation was in April, which after funding from Tencent and others was around $11.6 billion.
Once the recent round of financing gets over, SoftBank Vision Fund will pip Tiger Global which is the largest investor in Flipkart now, by owning about one-fifth of the company.
SoftBank, which is also the largest investor in top Indian cab hailing service Ola and hotel aggregator Oyo, is now wanting to reap a windfall from the burgeoning ecommerce sector which will likely rake in sales north of $35 billion by 2020.