Three years after it exited India’s online market giant Flipkart, Japanese-based multinational conglomerate Softbank Group Corp is planning on making an investment in Flipkart. Softbank has reportedly held talks with Flipkart and wants to make an investment within the range of $600-$700 million.
Softbank exited Flipkart three years ago after selling its entire stake to Walmart. Softbank’s proposed investment is a part of its Softbank Vision Fund 2’s $1.2 to $1.5 billion funding round. If this investment pulls through, Flipkart’s value could rise to between $25 to $30 billion dollars according to reports.
The development could be a part of a larger funding round which could witness the participation of independent wealth funds like Canada’s CPPIB, Abu Dhabi’s ADQ, and the company’s already existing investors like Qatar Investment Authority and GIC. Flipkart plans on going public in 2022 and is hoping to have a valuation of $40 billion. Flipkart is likely to have a funding round before its IPO. The transactions are expected to take place before Flipkart’s proposed listing in the U.S. in the next few months.
Before Softbank Global Corp exited online market giant Flipkart in May 2018, its Softbank Vision 1 fund had invested the sum of $2.5 billion in the company in August of the previous year. The company sold its stake to Walmart after Walmart became a part of Flipkart.
According to people who knew about the matter, “the talks have been ongoing with Softbank and the final contours of the deal will be drawn up in the next few weeks”. What this means if that Softbank’s investment, when completed, could make Flipkart push back its plans of an Initial Public Offering (IPO) in the US. “This would mean that Flipkart will stay on as a private company for longer than what was being talked about”, a person who knew about the matter said.
As mentioned earlier, Flipkart has plans on going public by early next year. Both Flipkart and Softbank are yet to give an insight on their discussions.
Softbank Group Corp, with its Softbank Vision Fund 2, plans on making a series of investment in the Indian market. The company is reportedly planning to also invest in tech firm Zeta and online food service Swiggy.