SoftBank Likely to Invest $700 Million in Flipkart
It’s been reported that SoftBank Group has been in talks with Walmart-owned Flipkart to invest up to $700 million. However, the development has surfaced three years post the Japanese group left the e-commerce giant by selling its stake to Walmart.
SoftBank’s Vision Fund has discussed with Flipkart regarding the deal, according to a report. As per to the proposed investment is part of SoftBank Vision’s larger $2 billion funding round. If the funding discussion materialise, Flipkart’s value is likely to touch $25-$30 billion, according to the report.
The report said the investment arm of Naspers, Prosus Ventures, and other existing investors could also raise their stakes.
The transaction is expected to be completed before the online giant’s proposed listing in the next 12-18 months. The investors signing up for the ongoing round expect Flipkart’s valuation to rise around $35-$40 million by that time.
Flipkart is unlikely to go for another round of funding before its initial public offering. It may be noted that JP Morgan and Goldman Sachs are managing the transaction for Flipkart.
In August 2017, SoftBank’s Vision Fund 1 invest $2.5 billion in Flipkart but peddled its entire stake of nearly 20 per cent within a year after Walmart decided to buy a controlling stake in Flipkart for $16 billion. SoftBank had sold its stake for $4 billion, making a profit of $1.5 billion on the deal.
Furthermore, the Japanese investor had to pay a hefty short-term capital gains tax for the Flipkart exist. Presently, SoftBank is again in talks with Flipkart to make a return. If the fresh deal goes through, it will be SoftBank’s second entry in the Bengaluru-based e-commerce giant as an investor.
Notably, SoftBank Vision Fund 2 had also made a few aggressive bets in India this year and is now ready to invest in food delivery startup Swiggy, according to sources. This would be its first investment in the Indian foodtech space.