SoftBank Vision Fund invests $2.5 billion in Flipkart

Flipkart said the Soft Bank investment which is the biggest-ever private investment in an Indian technology company will make the Vision Fund one of the largest shareholders in the online retailer

In India, investments by Son, with SoftBank and the Vision Fund, is valued at over $6 billion, with stakes in taxi-hailing app Ola, hotel room aggregator Oyo Rooms, advertisement aggregator InMobi, a joint venture with Bharti Enterprises and Foxconn for setting up solar and wind farms, besides those in Snapdeal and Paytm.

Flipkart and Amazon's massive reserves of cash have left the pair as the two largest generalist retailers in India, a market with substantial retail ecommerce growth potential. Now, Flipkart will have in excess of $4 billion of cash on balance sheet.

In a statement, it said: "The investment is part of the previously announced financing round, where Flipkart had raised capital from three of the world's premier technology companies - Tencent, eBay and Microsoft".

India's Flipkart has secured almost US$2.5bil (RM10.7bil) in funding from Japan's SoftBank Group, giving the online retailer more firepower to compete with Amazon in the country's burgeoning e-commerce market. "For this, Flipkart might acquire somebody who can make a difference to execution or few tough categories where they are weak such as furniture, babycare and FMCG", said the founder of an online commerce company.

Flipkart co-founders Binny Bansal and Sachin Bansal called it a monumental deal for the company and India.

Meanwhile, Amazon has been making moves of its own.

Meanwhile, Flipkart's onetime largest rival, Snapdeal, is in the midst of a reorganization that will leave it slimmed down following the recent collapse of acquisition talks with Flipkart. Out of the total $1.9 Bn fundraise in these 55 deals Flipkart's earlier round contributed the most ($1.4 Bn).

"India is a land of vast opportunity", Mr. Son said in a statement.

However, that plan soured after Snapdeal made a decision to remain independent. Amazon's share price has buoyed Bezos to commit big bucks to win India at all costs - a $5-billion war chest till date.

Another leading investor Ravi Gururaj was of the view that the recent funding has just made things hard for the other global players such as Rakuten, Walmart and Alibaba to make a roadway in the Indian e-commerce market.

It confirmed the deal but didn't say how much SoftBank had invested.

Softbank's investment fund, which is now one of Flipkart's biggest shareholders, is also backed by the government of Saudi Arabia, Apple, Qualcomm, and manufacturing heavyweight Foxconn, among others.

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