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SoftBank invests about $2.5 billion in Flipkart

SoftBank invests about $2.5 billion in Flipkart”

Flipkart said the investment is part of the previously announced financing round in which the company had raised $1.4 billion (Rs 9,000 crore) from Chinese Internet giant Tencent Holdings Ltd, US online retailer eBay and software giant Microsoft Corp.

Tiger Global, the hedge fund that had invested in Flipkart early on, is expected to have received a partial exit following this investment. Mint couldn't immediately ascertain the exact amount of the deal.

As a result, SoftBank will now become the largest shareholder in Flipkart, just days after Snapdeal founders chose to terminate merger talks with the Bangalore-based company.

Flipkart is the biggest ecommerce firm in India, with around 37% market share, according to industry estimates. Very few economies globally attract such overwhelming interest from top-tier investors.

In a tweet, Binny Bansal, co-founder and CEO, Flipkart welcomed SoftBank Vision Fund. In its statement, Flipkart pointed out that this is the biggest ever private investment in an Indian technology company, and will make the SoftBank Vision Fund one of the largest shareholders in Flipkart.

"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".

ET had reported that SoftBank would look to invest between $1.5 to $2 billion into Flipkart after talks between Snapdeal and Flipkart fell through. The investment in April 2017 was done at a post-transaction valuation of $11.6 Bn.

SoftBank Vision Fund is the global technology-focused investment fund.

The fresh funds for Flipkart come at a time when the company is scripting a revival in the face of rapid advances by Amazon, which has committed an investment of $5 billion in India. Softbank has a record of partnering with cutting-edge technology companies and Flipkart is hopeful of a long term fruitful partnership with the investor. This investment round allows Flipkart to further its mission to transform India and SoftBank to invest in a market leader with scale. The talks collapsed at the end of July, but multiple reports suggested SoftBank would participate in Flipkart's next funding round. The fund is now headed by Softbank Group founder and CEO Masayoshi Son and India born Rajeev Misra, designated as CEO of SVF. Citi served as financial advisor and AZB and Partners served as legal advisor to the SoftBank Vision Fund.



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