SONRISE IN FLIP­KART SoftBank De­liv­ers $2.5b Ja­panese co buys 20% stake; deal marks big­gest pri­vate in­vest­ment in sec­tor

The Economic Times - - Front Page - Our Bureaus

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

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