Founded by Masayoshi Son, SoftBank Vision Fund is in talks about its direct investment in India’s Flipkart Online Services Pvt, according to people familiar with the matter.
The company is about to invest between $1.5 billion and $2 billion into the largest Indian e-commerce operator within the next two months. About half the money is set to go to Tiger Global Management, which wants to sell part of its Flipkart stake, while the rest of the funds would go to Flipkart, said a person while requesting his/her identity to be hidden as the discussions are still in private.
The Vision Fund was founded by Son, chairman of SoftBank Group Corp., but operates as a separate entity. The prospective Flipkart investment comes after Snapdeal, which was backed by SoftBank directly, on Monday spurned a merger proposal from Flipkart to pursue a future as a standalone company. The Japanese company has largely written off its investment in Snapdeal.
Flipkart was valued at $11.6 billion in April after EBay Inc., Tencent Holdings Ltd. and Microsoft Corp. together invested $1.4 billion. Adding investment from the deep-pocketed Vision Fund would help the Indian company compete with Amazon.com Inc., which has said it plans to invest at least $5 billion in its India operations.
SoftBank has been an enthusiastic supporter of e-commerce in developing markets. The company’s investment in Alibaba Group Holding Ltd. started with $20 million in 2000. Its stake in the Chinese company is now worth more than $100 billion.
Flipkart did not respond to an email seeking comment while a SoftBank spokeswoman declined to comment saying SoftBank Vision Fund independently evaluates each investment on its own merit.