SoftBank to invest $2.5bn

SOFTBANK Vision Fund will invest about $2.5 billion (R33.58bn) in Flipkart Group, swelling the Indian e-commerce players’ cash hoard as it vies with Amazon.com, people familiar with the matter said.

The investment includes approximately $1.5bn directly into Flipkart and $1bn for part of Tiger Global Management’s stake, the people said, asking not to be identified discussing the details. The deal will make the fund created by SoftBank Group chairperson Masayoshi Son the biggest shareholder of Flipkart, the people said.

Flipkart announced the fund’s investment earlier without revealing an amount.

The investment swells Flipkart’s cash holdings to more than $4bn and comes less than two weeks after Snapdeal, backed by SoftBank itself, walked away from a proposed merger with Flipkart. Amazon founder Jeff Bezos has vowed to spend $5bn in India to gain customers in a market with 500 million internet users where e-commerce is expected to grow at 30 percent annually over five years.

“This kind of funding can help Flipkart match Amazon’s spending dollar-to-dollar for the next three to four years,” said Satish Meena, the Delhi-based senior forecast analyst at Forrester.