Flipkart got billions to afford more Billion Day sales for you

  • Flipkart got billions to afford more Billion Day sales for you

Flipkart got billions to afford more Billion Day sales for you

The latest deal further consolidates SoftBank's position in one of the fastest-growing e-commerce markets in the world, where it invested $1.4 billion in another Internet firm One97 Communications just three months ago.

Flipkart has also raised capital from three other companies - Tencent, eBay and Microsoft.

The investment is a mix of primary and secondary capital and the ET reports that it will give a partial exit to Flipkart's biggest backer Tiger Global. With razor-sharp execution, we must continue to transform commerce in India through technology and India-specific innovations. This was because Softbank was really keen to merge Snapdeal with Flipkart, and to consolidate their investments for a larger battle with Amazon.

Flipkart's balance sheet has now been boosted to more than $4bn of cash on its balance sheet.

This is an alpha moment not only for the e-commerce market, but also for the Indian tech ecosystem. "SoftBank's proven track record of partnering with transformative technology leaders has earned it the reputation of being a visionary investor", the co-founders said in the statement.

However, things didn't turn work out and Flipkart raised a funding round, led by South African media giant Naspers, in 2012 that valued it at $1bn. "We want to support innovative companies that are clear winners in India".

"India is a land of vast opportunity", SoftBank chairman Masayoshi Son said in a statement, calling Flipkart "the pioneers in Indian ecommerce". Citi served as financial advisor and AZB and Partners served as legal advisor to the SoftBank Vision Fund. The Economic Times pegged the deal between $2.4 - $2.5 billion (around £19 billion).

An acquisition in these verticals will solve the difficulty of building a supply chain for these specialised categories, "To match up, Flipkart will have to invest at least as much as Amazon, and grocery will be important to increase wallet share", said Satish Meena, senior forecast analyst at Forrester. When SoftBank made the offer to invest in Flipkart, it was looking to get the load off of its bad investment in Snapdeal, which did not yield expected returns in the Indian ecommerce space. Snapdeal is a portfolio company of SoftBank.

Softbank's funding will help Flipkart to hire more people in the field of research to develop future technologies to improve customer experience, and compete on a more level playing field with Amazon.