To compete with its e- commerce competitor Amazon Inc, SoftBank Vision Fund will invest $2.5 billion in Flipkart, boosting its cash holdings to more than $4 billion. $1.5 billion will go directly to Flipkart and $1 billion will go to Tiger Global Management’s stake. SoftBank Group Corporation Chairman Masayoshi Son will be the biggest shareholder of Flipkart after this deal. Ecommerce is expected to grow at 30 percent annually for the next five years in India.
Valued at $11.6 billion, Flipkart’s cash holdings will help it to compete with Amazon ‘s $5 billion fund that its founder Jeff Bezos has vowed to gain customers in a market with 500 million internet users. Flipkart was the only remaining option for Softbank after merger between Snapdeal and Flipkart to create a stronger competitor to Amazon fell apart after objections from Snapdeal’s founder.
About SoftBank Group
SoftBank Group Corp. is a Japanese multinational telecommunications and Internet corporation established on September 3, 1981, and headquartered in Tokyo, Japan.
It has interests in broadband, fixed-line telecommunications, e-commerce, Internet, technology services, finance, media and marketing, semiconductor design, and other businesses.
SoftBank operates SoftBank Mobile in Japan, owns Sprint Corp. in the U.S., holds stakes in Chinese e-commerce Alibaba Group Holding Ltd. and Japanese internet portal Yahoo Japan Corp and owns ARM Holdings PLC.