SONRISE IN FLIPKART SoftBank Delivers $2.5b Japanese co buys 20% stake; deal marks biggest private investment in sector
Bengaluru | New Delhi: SoftBank, the world’s largest technology investment firm, has bought a fifth of India’s most valuable startup — Flipkart — for a mammoth $2.5 billion, in a deal that marks the biggest private investment in the country’s consumer technology sector. The Japanese investor — best known for backing China’s Alibaba — is now the biggest investor in India’s largest online retail company that is battling US’ Amazon in one of the world’s most competitive markets for ecommerce. “This is a monumental deal for Flipkart and India,” said cofounders Sachin Bansal and Binny Bansal, terming the deal as recognition of India’s “un- paralleled potential to become a leader in technology and ecommerce on a massive scale”. The investment — from SoftBank’s $100-billion Vision Fund — is a mix of direct funding to the ecommerce company that is termed as primary investment, and also the purchase of shares from existing shareholders that is described as secondary investment. The deal will provide a partial exit to Tiger Global, the New York-based investment firm, which until now was the largest and most influential investor in Flipkart, three people aware of the deal told ET.
Tiger Global will own about 18% stake in the company now while South African media giant Naspers along with Chinese Internet conglomerate Tencent will hold another 20% stake.
This secondary transaction, which is estimated to have valued the company at $7-8 billion, will also provide partial exits to the two cofounders, employees as well as Flipkart’s first investor — venture fund Accel Partners, sources said. The final contours of the secondary share sale are still being finalised.
“Only the share sale by Tiger Global has been finalised till now, and exit will happen on the basis of how much a firm has invested,” said one source briefed on the matter.
Flipkart’s latest round brings its total funding to over Flipkart, Paytm, Ola & InMobi SoftBank gets
stake in Flipkart
Its total India investment is more than
Deal to provide partial exits to Tiger Global, Accel Partners, cofounders and staff
Flipkart’s total capitalisation more than the
Key Stakeholders in Flipkart board:
SoftBank, Tencent, Naspers, Tiger Global & Accel besides founders Sachin & Binny Bansal