SoftBank Wants Back Into Flipkart; May Shell Out $700 Million

The wheel of fortune is spinning again for Walmart-controlled Flipkart. Last month, the word on the street was that India’s Flipkart was out to raise $1 billion or more before having an initial public offering (IPO) of stock in the U.S.

The Economic Times of India reported on Friday (June 4) that the IPO could get put on hold as a variety of investors, including the SoftBank Vision Fund, consider putting up cash for Flipkart. The Japanese SoftBank Group was founded by Masayoshi Son.

The SoftBank fund has held discussions with Flipkart on investing $600 million to $700 million in the eCommerce and grocery delivery company. Flipkart faces such rivals as Amazon and India’s Reliance Retail.

The Economic Times said that the SoftBank money would be part of a larger $2 billion round of funding. Possible sources include a group of sovereign wealth funds like Abu Dhabi’s ADQ and Canada’s CPPIB, as well as Flipkart’s existing investors, such as GIC and Qatar Investment Authority.

The deal would likely value the Bengaluru-based Flipkart at up to $30 billion, sources told ET. “The talks have been ongoing with SoftBank, and the final contours of the deal will be drawn up in the next few weeks,” said a person close to the developments.

Sources said that if the SoftBank money comes through, Flipkart might delay its IPO: “This would mean that Flipkart will stay on as a private company for longer than what was being earlier talked about.”

SoftBank had backed Flipkart in the past with a $2.5 billion investment. It later sold all of its 21 percent stake to Walmart for about $4 billion in 2018. Walmart currently owns 76.9 percent of Flipkart. Existing Flipkart investors include Tencent Holdings, the Chinese eCommerce conglomerate, which has a 5 percent stake. Tiger Global Management owns 4.7 percent.

Flipkart’s rival Amazon is big in the Indian market, having invested more than $7 billion in the country. The eCommerce giant has diversified from eCommerce to online payments, streaming and food delivery.