Indian e-commerce giant Flipkart might soon get a fresh boost of funding from Japanese telecom and internet conglomerate SoftBank, according to a recent report in the Factor Daily. The capital will help Flipkart in retaining its Indian e-commerce leader crown and give a tough fight to Jeff Bezos’ Amazon, which is currently trying hard to invade India’s $30 billion e-commerce market.
The report claims that the funding will be a very inclusive part of the currently ongoing Snapdeal-Flipkart merger deal because of which some of the troubled e-commerce firm Snapdeal investors are contemplating an exit.
According to some strong rumours going around in the startup world, SoftBank is planning a $2 billion investment in Flipkart, as part of a primary funding. “The entire money is not coming as a primary investment. Effectively, Flipkart will get only $500 million out of the $2 billion as primary funds,” said a source in the report.
The report also divulged that the $1.5 billion amount, which is the remaining amount will be used by SoftBank to pay back back Tiger (Global), Snapdeal’s investor. Tiger Global is also Flipkart’s largest shareholder.
According to the report, Kalaari Capital and Nexus Ventures Partners, which are two of the larger Snapdeal investors who also hold board positions, will get an exit. The merger, which was being deemed as India’s biggest consolidation in the e-commerce sector, is taking a long time to materialise as initially Snapdeal’s early-stage investor Nexus Venture Partners (NVP) was not happy with the payout being offered by the Tokyo-headquartered telecom and internet giant SoftBank. Snapdeal’s founders, Kunal Bahl and Rohit Bansal, along with a couple of other small and mid-sized investors, will exit Snapdeal as well. The report claims that even Tiger Global is looking for a partial exit from Flipkart.
Weeks ago Snapdeal rejected Flipkart’s $850 million buyout offer as Snapdeal’s board felt that the offer made undervalued the company (Read Here). However, according to some sources, Flipkart isn’t ready to take no for an answer yet and has decided to give its rival company a new improved offer, which is likely to be close to USD 1 billion (Read Here).
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