SoftBank to invest $500 Mn in E commerce Giant FlipKart.
17th, July 2017 - Startup funding
Indian Ecommerce giant Flipkart is in discussion to raise $500 Mn from Japanese investment giant SoftBank. The investment will enable SoftBank to acquire a sizeable share of Flipkart following the merger with Snapdeal.
As per the report, SoftBank has promised to invest up to $2 Bn in the online marketplace, of which the $500 Mn will serve as primary funding. Sources revealed that the remaining amount, will be paid to US-based hedge fund Tiger Global in exchange for one-third of its shares in Flipkart. At present, Tiger Global holds around 28% stake in the ecommerce platform
A portion of the $1.5 Bn will also gone into paying back Snapdeal investors like Nexus Ventures Partners and Kalaari Capital, both of which are looking to exit the struggling company. In addition to founders Rohit Bansal and Kunal Bansal, several other small and mid-sizes investors are also lanning to sell their stake to SoftBank.
The question we have is, how these investors are poring their money to these never profit making ventures. In India major e-commerce player are running their business based on discount model. Market rumour says if ecommerce player stop giving huge discounts to their consumer, customers will never buy from these online stores. The main reason is customers are coming to online buying is because of discounts. If they stop discount these buyers are ready to go back to brick & mortar store where the possession and choice will be more.
Only time will have give us the direction about Ecommerce industry and investor learn about their mistake. In Financial aspect if ego comes it is going to be tragic event.
Categories: Startup Event , Startup , Startup community , News , Food tech , Legal tech startup , HR Tech , Tech Startup , Guest blog , Featured entrepreneur , FinTech , International news , International Startup , Analytics , Product review , Social enterprise , Health care , My journey , Co working space , Fashion , Sponsored , F&B