SoftBank puts $2.5 bn into Flipkart's wallet

SoftBank puts $2.5 bn into Flipkart's wallet

"We look forward to being a part of Flipkart's journey towards becoming one of the most successful e-commerce companies in the world", said Rajeev Misra, CEO of the Vision Fund.

The investment will make the $100 billion Vision Fund one of the largest shareholders in Flipkart, the e-tailer said.

The investment, which comes less than two weeks after Snapdeal dropped merger talks with its bigger rival, will swell Flipkart's cash holdings to more than $4 billion.

Snapdeal, which is also backed by SoftBank, ruled out a purchase in July after months of negotiations. In April, Didi Chuxing raised $5 billion and increased its total fund raise to $15 billion, overtaking Uber that has raised $12.9 billion.

The Flipkart funding reaffirms the faith of global players like SoftBank, Tiger Global, eBay, and Microsoft in Indian companies, TOI said in its report.

People familiar with the deal said the investment is worth $2.5 billion, with about $1.5 billion being directly funneled into Flipkart and $1 billion for part of Tiger Global Management's stake. The two companies have been locked in an intense battle for leadership in the burgeoning Indian e-commerce market.

For Flipkart, the funding provides it with more arsenal to compete with Amazon.

"India has a thriving Internet market with close to 500 million Internet users and as per market research, the Indian e-commerce market is expected to grow at a five-year CAGR in excess of 30 per cent", the statement said.

Sharma noted that since Flipkart has been the flag-bearer for the local ecosystem, its leading position among highly funded companies of the world reinforces the positive belief around the long-term India opportunity.

The funding round further solidifies Flipkart's balance sheet and will help accelerate investment in driving continued market leadership, it added. "Very few economies globally attract such overwhelming interest from top-tier investors", Flipkart co-founders Binny Bansal and Sachin Bansal said. The completion of the investment in Flipkart is subject to customary regulatory approvals and closing conditions. "We want to support innovative companies that are clear winners in India". Citi served as financial advisor and AZB & Partners served as legal advisor to the SoftBank Vision Fund. Japan's telecom giant SoftBank has funded 2.4 billion United States dollars recently and this has certainly established Flipkart in the new position.