SoftBank Vision Fund invests $2-2.5 bn in Flipkart

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SoftBank Vision Fund invests $2-2.5 bn in Flipkart

"We look forward to being a part of Flipkart's journey towards becoming one of the most successful e-commerce companies in the world", said Rajeev Misra, CEO of the Vision Fund. After this financing round, Flipkart will have in excess of $4 billion of cash on balance sheet.

Having failed to secure some of Flipkart last month when its bid to acquire Snapdeal fell apart, SoftBank has now got its hands on the Amazon rival. In April, Didi Chuxing raised $5 billion and increased its total fund raise to $15 billion, overtaking Uber that has raised $12.9 billion.

The investment is part of the previously announced financing round, where Flipkart had raised capital from China's internet company Tencent, eBay and global technology giant Microsoft.

The discussions were terminated after the smaller rival chose to pursue an independent path. Sources had said SoftBank was keen to pick up stake in Flipkart and was looking at investing about Dollars 1.5-2 billion. The homegrown e-commerce company has to date raised nearly $7 billion in capital, higher than that raised by global behemoths like online house rental aggregator Airbnb ($3.3 billion) and mobile phone maker Xiaomi ($1.4 billion).

Combating Jeff Bezos' new Indian arm will be a tough ask especially after the American promised extra funding in addition to the $5bn already pledged, but the boosted bank account will certainly be a welcome new weapon for Flipkart.

Completion of the investment is subject to customary regulatory approvals and closing conditions.

"Since Flipkart has been the flag-bearer for the local ecosystem, this reinforces the positive belief around the long-term India opportunity", Nitin Sharma, principal and founding member at early-stage VC fund Lightbox told ET. Very few economies globally attract such overwhelming interest from top-tier investors.

The funding round further solidifies Flipkart's balance sheet and will help accelerate investment in driving continued market leadership, it added. At that time, Flipkart was valued at $11.6 billion. LLC served as financial advisor and Gunderson Dettmer LLP served as legal advisor to Flipkart. We want to support innovative companies because they are best positioned to leverage technology. Citi served as financial advisor and AZB and Partners served as legal advisor to the SoftBank Vision Fund.

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