Amazon's big rival in India just got $2.5 billion

Softbank's Vision Fund invests in Flipkart becomes largest shareholder in the firm

Meanwhile, Flipkart's onetime largest rival, Snapdeal, is in the midst of a reorganization that will leave it slimmed down following the recent collapse of acquisition talks with Flipkart. Tiger Global Management, one of the earliest backers of Flipkart, partially sold its stake to SoftBank.

They further stated: "It is recognition of India's unparalleled potential to become a leader in technology and e-commerce on a massive scale".

It also underscores global investors' growing confidence in the Indian e-commerce sector where dominant players Flipkart and Amazon are not burning cash on deep price discounts as much as a few months ago. This is the largest investment the SoftBank Group's IT venture has made in a private internet firm in India, according to the Business Standard. After this, Flipkart will have in excess of $4 billion of cash on balance sheet.

Another leading investor Ravi Gururaj was of the view that the recent funding has just made things hard for the other global players such as Rakuten, Walmart and Alibaba to make a roadway in the Indian e-commerce market. Softbank has a record of partnering with cutting-edge technology companies and Flipkart is hopeful of a long term fruitful partnership with the investor.

Flipkart has won the backing of Japanese billionaire Masayoshi Son in its duel against the world's biggest online retailer Amazon in the fast-expanding Indian e-commerce market. "We want to support innovative companies that are clear winners in India because they are best positioned to leverage technology and help people lead better lives", said Son in a statement.

SoftBank was supposed to invest $1.52 billion in the proposed merged Snapdeal-Flipkart entity, but after the talks fell through, SoftBank chairman Masayoshi Son said that he respects the decision of the founders and chose to focus the fund's effort in Flipkart.

"The Vision Fund is proud to be part of this landmark transaction which is a strong endorsement of India and its thriving economy", added Rajeev Misra, CEO of the SoftBank Vision Fund.

SoftBank's Vision Fund was launched in October 2016.

Flipkart, which started by selling books on the Internet in 2007, was struggling to raise money until previous year, hobbled by a tough private funding environment and shrinking valuations. Out of the total $1.9 Bn fundraise in these 55 deals Flipkart's earlier round contributed the most ($1.4 Bn).

This round makes SoftBank one of the biggest investors in Flipkart.

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