SoftBank to invest in Flipkart

According to reports, SoftBank Group Corp. is in talks with Flipkart to invest $700 million. The proposed investment in Flipkart from SoftBank’s Vision Fund 2 is part of a $1.2-1.5 billion funding round. The transaction is expected to value Flipkart at $28 billion, one of the people said, adding that the deal is expected to close in 3-4 months.

The transaction could value Flipkart at as much as $30 billion, depending on the final set of investors. Prosus Ventures, the investment arm of South African conglomerate Naspers, and other existing investors could raise their stakes, the people said.

The transaction will precede a proposed listing of the company, slated to be in the next 12-18 months, the first person said. The investors signing up for the ongoing round expect Flipkart’s valuation to rise to around $35-40 billion by then, with online sales surging because of the pandemic.

Singapore’s sovereign wealth fund GIC and Canadian pension fund CPPIB are also in talks to invest in Flipkart. Flipkart is unlikely to go for another funding round before its IPO. Investment banks JPMorgan and Goldman Sachs are managing the transaction for Flipkart.

This is SoftBank’s second entry as an investor in Flipkart. It exited the company in May 2018. The proposed deal is also happening at nearly twice the valuation at which it sold its stake three years ago.

SoftBank Vision Fund 2 has made aggressive bets in India this year. It is now set to invest in food delivery unicorn Swiggy, which would be its first bet in the foodtech space.