SoftBank has become the major power player in India’s online shopping market, after investing in Flipkart through its $US100 billion (£77 billion) Vision fund.
Flipkart is the biggest ecommerce firm in India, with around 37% market share, according to industry estimates.
It confirmed the deal but didn’t say how much SoftBank had invested. The Economic Times pegged the deal between $US2.4 — $US2.5 billion (around £19 billion). Flipkart had already raised $US1.4 billion (£1.1 billion) as part of the same funding round from Tencent, Microsoft, and eBay. Overall, the shopping company now has $US4 billion (£3.1 billion) in cash.
This round makes SoftBank one of the biggest investors in Flipkart. But it’s also the majority shareholder in Flipkart’s biggest rival, Snapdeal, which has 14% of the market. Between them, Flipkart and Snapdeal account for more than 50% of the Indian online shopping market, though Amazon India is a growing rival. SoftBank’s also an investor in Indian ecommerce payments firm Paytm.
The investment caps a months-long saga involving SoftBank trying to acquire an interest in Flipkart, originally by trying to orchestrate a merger with Snapdeal. The talks collapsed at the end of July, but multiple reports suggested SoftBank would participate in Flipkart’s next funding round.
SoftBank CEO Masayoshi Son said in a statement: “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.”