MUMBAI: Seeking to tap into the growing e-commerce market in India, the Japanese telecom giant SoftBank announced a $627 million investment in the home-grown retailer Snapdeal, becoming the largest investor in the company.
This is the largest investment made by a single investor in an e-commerce company in India. Other existing investors have also participated in this round with a significant undisclosed investment.
Through this strategic investment and partnership with Snapdeal, the telecom group aims at strengthening its presence in India and leveraging synergies with its network of Internet companies around the world, according to the press release issued by the e-tailer.
While on the other hand, Snapdeal, will use the investments in expanding its chain of fulfillment centres. It will also look to make 3-4 strategic acquisitions in the coming few months specifically in the area of mobile technology and is planning to set up an incubation centre to hone and harness start-up businesses in the mobile technology space within next six months.
Talking about the investment, SoftBank chairman and CEO Masayoshi Son said, “Since SoftBank’s foundation, our mission has been to contribute to people’s lives through the Information Revolution. We believe India is at a turning point in its development and have confidence that India will grow strongly over the next decade. As part of this belief, we intend to deploy significant capital in India over the next few years to support development of the market.”
Adding to that, SoftBank’s vice chairman Nikesh Arora reckoned, “India has the third-largest Internet user base in the world, but a relatively small online market currently. This situation means India has, with better, faster and cheaper Internet access, a big growth potential. With today’s announcement SoftBank is contributing to the development of the infrastructure for the digital future of India. We want to support the leaders and entrepreneurs of the digital future; Kunal and Rohit are two such great leaders.”
Nikesh Arora will also be joining the board of Snapdeal as part of this strategic investment by the SoftBank Group.
Morrison & Foerster LLP acted as legal advisor to advising SoftBank on India law matters.
“Our entire team at Snapdeal is thrilled and honoured to have SoftBank as a strategic partner. With the support of Son-san and Nikesh, we are confident we will further strengthen our promise to consumers and create life changing experiences for 1 million small businesses in India,” said Snapdeal co-founder and CEO Kunal Bahl.
Founded in 2010, the company also claims to have more than 25 million registered users and more than 50,000 business sellers. Earlier this year, Snapdeal had raised $133.77 million in a round led by eBay and $105 million from institutional investors including Temasek, Myriad, Tybourne, Blackrock Inc. and Premji Invest. Tata Sons Chairman Emeritus Ratan Tata also made a personal investment into the company.
