The investment by the SoftBank Vision Fund gives India's largest homegrown e-commerce player additional firepower to compete with USA e-commerce giant Amazon.com which has said it will invest $5 billion in India. The investment is a mix of primary and secondary capital, it added.
According to a person aware of the development, SoftBank Vision Fund's investment was a mix of primary and secondary transactions. "After this financing round, Flipkart will have in excess of $4 billion of cash on its balance sheet".
SoftBank, which has investments in Indian start-ups like Snapdeal and cab aggregator Ola, had committed investments worth $10 billion in India in 2014.
In its battle against global mammoth Amazon, the backing by two of the most prominent global investors - Tiger Global Management and now SoftBank - gives Flipkart a major boost in terms of improving their technology and strategising.
SoftBank has an India portfolio spanning e-commerce, ride sharing, digital payments, hospitality, clean energy and telecommunications, which is valued at over Dollars 6 billion. "Very few economies globally attract such overwhelming interest from top-tier investors", Binny Bansal and Sachin Bansal, co-founders of Flipkart, said in a statement.
Earlier in the month, Masayoshi Son, CEO of SoftBank had said he respected the decision of Snapdeal founders to call off merger talks with Flipkart and the Japanese firm was pursuing separate discussions with the largest Indian e- retailer.
He said: "India is a land of vast opportunity. We want to support innovative companies that are clear winners in India because they are best positioned to leverage technology and help people lead better lives", said Masayoshi Son, founder and chairman and chief executive of SoftBank Group Corp.
SoftBank has long held a significant stake in Snapdeal, which has lost market share to both Flipkart and Amazon in India. It brings a ray of hope for the Indian startups as well as ecommerce space. This deal makes SoftBank one of the largest shareholder in Flipkart.
Apart from this the funding raised by SoftBank also emerges as a masterstroke by Flipkart.