SoftBank fund pumps record $2.5bn into India's Flipkart

Flipkart said the Soft Bank investment which is the biggest-ever private investment in an Indian technology company will make the Vision Fund one of the largest shareholders in the online retailer

"This is the biggest ever private investment in an Indian technology company and will make the Vision Fund one of the largest shareholders in Flipkart", Flipkart said in a statement.

On Thursday Flipkart said SoftBank's investment, a mix of primary and secondary capital, is part of the previously announced financing round with Tencent, eBay and Microsoft.

The deal comes just 10 days after SoftBank's attempts to forge a deal between Flipkart and smaller rival Snapdeal - and thwart Amazon's ambitions in India - fell apart following months of negotiations. We want to support innovative companies because they are best positioned to leverage technology.

Earlier this month PTI had reported, citing industry sources, the Japanese conglomerate is looking at investing about $2 billion in the home-grown e-commerce major.

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In recent times, Flipkart also completed the acquisition of eBay India, and was reportedly in talks to acquire Snapdeal. Very few economies globally attract such overwhelming interest from top-tier investors. Both the companies have been locked in an intense battle for leadership in the fast-growing Indian e-commerce market. "As the leader of the Indian e-commerce, the onus is on us to make its benefits reach the farthest corners of India", said Flipkart's Binny Bansal. Softbank has a record of partnering with cutting-edge technology companies and Flipkart is hopeful of a long term fruitful partnership with the investor. Citi served as financial advisor and AZB & Partners served as legal advisor to the SoftBank Vision Fund.

After the latest round, Flipkart has raised more than $6 billion in cash since starting out in 2007.

According to data from Bank of America Merrill Lynch, Flipkart is expected to control a 43% share of retail ecommerce sales in India this year, compared with Amazon's 31%.

Flipkart, which started by selling books on the Internet in 2007, was struggling to raise money until previous year, hobbled by a tough private funding environment and shrinking valuations.

SoftBank, one of the earliest foreign tech-focused investors in Indian startup companies, is taking bigger bets in India, though several of its initial bets turned sour.

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