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SoftBank becomes largest investor in Snapdeal

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SoftBank, the Japanese internet and telecommunication group headed by CEO Masayoshi Son has pledged an investment of $10 billion (over Rs.60,000 crore) in India’s IT and communications space, one of the biggest investment commitments from a Japanese firm after Prime Minister Narendra Modi’s visit to that country. With a market cap of $92 billion, SoftBank has operations in broadband, fixed line telecom, e-commerce, finance, media and marketing. It is the largest shareholder in the Chinese e-commerce giant Alibaba Group Holdings Ltd (37 percent). The company has plans of investing the amount of $10 billion over 10 years. After announcing its entry, it boosted the signal by investing huge cash into Indian Ecommerce market. By investing $627 million in Delhi-based e-commerce player Snapdeal, headed by Kunal Bahl (co-founder and chief executive) the company entered the Indian e-commerce market which is worth $13 billion today which is expected to touch $90 billion by 2021 according to analysts. It has also become the largest investor in Snapdeal.

Snapdeal was starving to raise  funds, as local industry leader Flipkart raised $1 billion in July, and global e-commerce giant Amazon pledged further $2 billion in its India unit. By this funding Snapdeal, four years old company has raised about $1 billion this calendar year. Snapdeal plans to use the money to increase the supply chain and to maximize fulfilment centres to 30 cities, with current level of 40 fulfilment centres in 15 cities.SoftBank have joined the club of Snapdeal investors which include eBay, Kalaari Capital, Nexus Venture Partners, Bessemer Venture Partners, Intel Capital and Saama Capital, Temasek, BlackRock Inc, Myriad, Premji Invest and Tybourne and IndoUS Venture Partners.

SoftBank is also pumping a fund of $210 million in startup company Olacabs, taxi aggregator which competes directly with Uber. SoftBank already has investments in Indian companies, including InMobi and Hike.

Source – Reuters, LiveMint