SoftBank puts $2.5 bn into Flipkart's wallet

Judith Bessette
Agosto 14, 2017

The Indian e-commerce company has raised nearly Dollars 7 billion in a capital, higher than that raised by global firms like online house rental aggregator Airbnb ($3.3 billion) and mobile phone maker Xiaomi ($1.4 billion). The top two are both ride hailing platforms - Chinabased Didi Chuxing and USbased Uber.

The Flipkart Group includes brands such as Myntra, Jabong, PhonePe, Ekart and eBay.in, which are into online fashion and lifestyle, digital payments, supply chain and logistics, and e-commerce.

Till date, Flipkart has raised nearly 7 Billion USD in capital. One of the persons mentioned above said numerous smaller but influential shareholders like PremjiInvest (Azim Premji's investment vehicle) and Temasek were opposed to it.

"We welcome Vision Fund and we will continue to build our business with a focus on serving the needs of all Indians, and driving the next phase of technology adoption in India".

After this financing round, Flipkart will have in excess of $4 billion of cash on its balance sheet. Last month, Snapdeal called off the $950 million- merger (over Rs 6,000 crore) discussions with larger rival, Flipkart.

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. With the latest funding, Flipkart is estimated to have raised well over $5 billion to date. SoftBank was mediating the talks for Snapdeal's merger with Flipkart.

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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.

For Flipkart, the funding provides it with more arsenal to compete with Amazon. It is recognition of India's unparalleled potential to become a leader in technology and e-commerce on a massive scale.

While Flipkart has now raised close to $4 billion this year, Amazon pumped in about $600 million across various units in India since January this year.

"Since Flipkart has been the flag-bearer for the local ecosystem, this reinforces the positive belief around the long-term India opportunity", Nitin Sharma, principal and founding member at early-stage VC fund Lightbox told ET. "Very few economies globally attract such overwhelming interest from top-tier investors", Flipkart co-founders Binny Bansal and Sachin Bansal said. "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".

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