After Snapdeal setback, Softbank Fund to invest $2 billion in Flipkart

To help e-commerce marketplace Flipkart maintain its leadership positing against its rival Amazon in India, Softbank Vision Fund is planning to pour in $2 billion into the home-grown e-tailer.

Half of the funding will go to Tiger Global Management, which wants to sell part of its Flipkart stake, while the rest of the funds would go to Flipkart, according to a person close to the matter. SoftBank is known to be high on e-commerce in developing markets. It kicked off investment in Alibaba Group Holding Ltd. with $20 million in 2000. Its stake in the Chinese company is now worth more than $100 billion.

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Earlier, SoftBank was not happy with repeated objections and delays triggered by Snapdeal’s smaller shareholders. On Monday, Softbank-backed Snapdeal made it clear that it will go on independently and will not merge with Flipkart, in which Softbank was eyeing stake through the deal. SoftBank’s stake in Jasper stood at about 33 per cent.

Nasper in its report in June has hailed Flipkart ahead of Amazon and said that the Indian e-commerce poster boy is the market leader in the country’s $15 billion e-tail market.

However, Amazon India refuting the report said that it had posted an 85% increase in gross sales volumes in the three months to March from the year-ago period, growing much faster than the overall market and maintaining pressure on Flipkart. Amazon has committed to invest at least $5 billion in its India operations.

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Flipkart was valued at $11.6 billion in April after eBay, Microsoft and Tencent put in $1.4 billion.

In another development, eBay has also closed the sale of its India business eBay.in to Flipkart.

Image credit: Flickr