Though India’s Flipkart recently failed to acquire beleaguered rival Snapdeal and is facing stiff competition from Amazon, it continues to attract top tier investors. The latest injection of funds comes from Japanese investor Softbank and, interestingly, it also promotes Snapdeal.
Softbank’s Vision Fund has decided to invest US$2.6 billion in Flipkart. The latest round of funding takes Flipkart’s cash reserves to more than $4 billion. It would help the company take on the threat faced by arch-rival Amazon.
SoftBank will also buy Flipkart shares worth $1.2-1.4 billion from Tiger Global Management, Accel Partners, IDG Ventures and Flipkart co-founders Sachin Bansal and Binny Bansal, among others, according to the financial daily Mint.
Flipkart’s largest investor, Tiger Global, whose representative Kalyan Krishnamurthy is the company’s chief executive, will get a majority of the fund from SoftBank, the daily added.
Over the past four years, Amazon has expanded at a breakneck pace in India and has almost caught up with Flipkart in terms of stand-alone monthly sales. In terms of other key metrics such as app downloads, desktop visits and mobile website visits, Amazon India has already overtaken Flipkart.
According to data from market intelligence firm SimilarWeb, which tracks website traffic, Amazon India’s desktop visits stood at 276 million for the quarter to 30 June this year, compared with 167.6 million for Flipkart, reports Mint.