E-commerce marketplace Flipkart has received fresh investment from SoftBank Vision Fund, a technology-focused investment fund. While the amount of the investment remains undisclosed, ET reports that the total investment by Softbank Vision Fund is pegged at $2.5-2.6 billion making it the largest shareholder in the company.
— binnybansal (@binnybansal) August 10, 2017
The investment is part of the previously announced financing round, where Flipkart had raised capital from three technology companies — Tencent, eBay and Microsoft. After this financing round, the ecommerce player will have more $4 billion in its cash reserves.
According to Binny Bansal and Sachin Bansal, Co-Founders of Flipkart, this is a monumental deal for Flipkart and India.
“Very few economies globally attract such overwhelming interest from top-tier investors. It is recognition of India’s unparalleled potential to become a leader in technology and e-commerce on a massive scale. SoftBank’s proven track record of partnering with transformative technology leaders has earned it the reputation of being a visionary investor,” they said.
The company revealed that the funding round will help accelerate investment in driving continued market leadership. Currently, Flipkart Group is India’s largest e-commerce marketplace and includes group companies Flipkart, Myntra, Jabong, PhonePe and eBay.in.
The deal comes a week after the news about much-hyped Flipkart-Snapdeal merger fell through. With this investment, Softbank gets a market entry into largest domestic player in e-commerce in India. Also, this make it the largest investor in Flipkart, taking a lead over Tiger Global, the hedge fund that had invested in Flipkart early on.
“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,” said Masayoshi Son, Founder and Chairman & CEO, SoftBank Group.
SoftBank Vision Fund was set up to fund growth in the technology sector, investing up to $100 billion over the next five years. The Fund aims to invest through minority stake, majority stake and public equity investments of $100 million or more. It aims for a minimum investment horizon of ten years, providing businesses with a committed partner for long term growth.
“The Vision Fund is proud to be part of this landmark transaction which is a strong endorsement of India and its thriving economy. 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, Vision Fund.