29 November 2017, India:
Japenese conglomerate Softbank’s purchase of Tiger Global and Accel’s stakes in Indian e-retail firm Flipkart is awaiting clearance from CCI (Competition Commission of India).
The company invested $2.5 billion in Flipkart in August this year. According to reports, $1 billion of this $2.5 billion investment will be done by purchasing the secondary shares from Tiger Global and Accel. Tiger Global and Accel are early investors in Flipkart.
Flipkart has not responded to emails seeking comment on this matter. A Softbank spokesperson told VCCircle that they don’t comment on confidential business transactions.
The CCI website shows that, SVF Holdings (Jersey) LP (an entity set up to hold private equity investments on behalf of Softbank Vision Fund LP) has proposed to acquire up to 20 percent of Flipkart shares. The proposal is under review.
Softbank has invested in many Indian startups including Flipkart, Paytm, Ola, Snapdeal, Grofers, OYO, InMobi, Housing.com (later sold to PropTiger). The Japenese conglomerate is a big investor in Snapdeal. It tried for Flipkart-Snapdeal merger. The merger talks failed after Snapdeal rejected the offer.
Softbank has became a dominant player in India’s startup ecosystem. It is involved in another secondary sale transaction, where the Japenese conglomerate is buying Tiger Global’s shares in Ola. All parties involved in the deal have agreed on the transaction in principle. A formal process will be initiated soon to complete this deal. After this deal, Softbank will become the majority shareholder in Ola.
The company has invested $1.4 billion in Paytm. Some recent reports have stated that the company is planning to do a fresh investment of $500 million. According to those reports, this investment will be done in Paytm Mall app and will be used to counter Amazon in India.
Also read: Why is Japan’s SoftBank Focusing on India ?
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