SoftBank to invest $2 bn in Flipkart as Snapdeal takeover fails

SoftBank Vision Fund, the $100-billion fund floated by SoftBank chief Masayoshi Son to invest in technology companies, is in talks to invest $1.5-$2 billion in India's largest ecommerce firm Flipkart, reports today said, Son continues to look for investment opportunities in Indian ecommerce sector after the proposed merger between Snapdeal and Flipkart was been called off.

Reports say that negotiations between the two entities have begun, though neither entity was willing to confirm it. ''SoftBank continues to look for investment opportunities in India,'' the Japanese investor said in a bland email reply to media queries.

The development comes a day after Snapdeal, in which SoftBank is the largest investor, terminated its merger talks with Flipkart. This has given Masayoshi Son-led SoftBank the space to independently look at investing in Flipkart.

SoftBank, which has also invested in start-ups such as Grofers and cab aggregator Ola, has committed investments worth $10 billion in India. In May this year, it pumped $1.4 billion (over Rs9,079 crore) in digital payment platform Paytm.

The SoftBank Vision Fund, founded by Son, operates as a separate entity. It has participants such as Apple, Foxconn and the Public Investment Fund of the Kingdom of Saudi Arabia.

A statement issued by SoftBank in May said that the fund would target "meaningful, long-term" investments in companies that seek to enable the next age of innovation.

The fund, it added, would acquire minority and majority interests in both private and public companies, ranging from emerging technology businesses to established, multi-billion dollar companies that require substantial growth funding.

For Flipkart, any investment from SoftBank would give it more ammunition to take on Amazon. The two players have been locked in an intense battle for leadership of the Indian market and have been pumping in millions of dollars to strengthen their infrastructure as well as bring more sellers and buyers online.

In April, Bangalore-based Flipkart had raised $1.4 billion from Tencent Holdings, Microsoft Corp and eBay Inc in the biggest fund raising by an Indian internet firm in order to buy out, the failing Indian arm of eBay, which acquisition it completed on Tuesday.

The fund-raising valued Flipkart at $11.6 billion. This was, however, lower than the valuation of $15 billion in 2015.

Amazon, on its part, has pumped in around $600 million across various units in India since January this year.