SoftBank CEO Masayoshi Son has confirmed that the Japanese giant is now in talks with Flipkart to invest in the Indian ecommerce company directly. This comes after rival company Snapdeal, whose biggest investor is SoftBank, walked out of a distress sale to Flipkart after months of negotiation.
“We respect the decision of Snapdeal founders and we are engaged with Flipkart,” Son said after SoftBank announced second quarter results on Monday. Son did not give any details of the discussions with Flipkart.
SoftBank has invested $1.4 billion in One97 Communication, the parent company of Paytm.
There have been rumors of SoftBank investing US$1.5 billion to US$2 billion into Flipkart from its Vision Fund. This would further strengthen the hands of Flipkart in its battle with Amazon, after a life-saving US$1.4 billion funding round in April led by China’s Tencent.
SoftBank has also invested US$1.4 billion in One97 Communication, the parent company of Paytm, which has split into two companies, one for payments and the other for ecommerce. Chinese giant Alibaba controls Paytm ecommerce, which is building a Paytm Mall on the lines of Tmall in China.
Snapdeal, which sold off its payments subsidiary FreeCharge for US$60 million to Axis Bank in an all-cash deal, has said it will sell more assets and pursue an eBay-like model to become [an open marketplace that holds no inventories](, the parent company of Paytm) and just connects buyers with sellers.
For Flipkart, a direct investment from SoftBank would be far simpler than trying to assimilate a beleaguered Snapdeal, whose market share dwindled to 4 percent by March this year after losing big time to Amazon in 2016. Flipkart’s main investor Tiger Global, which has cooled down on India after splurging in 2015, is keen to offload some of its stake in Flipkart.