SoftBank Prompts Flipkart To Buy Snapdeal
Snapdeal is all set to be sold to the E- commerce giant Snapdeal. SoftBank which is Japan’s leading bank is predicting a likely merger between Flipkart and Snapdeal. If this deal is approved, then the E-commerce industry of India will grow significantly offering bigger operations in the online marketplace.
SoftBank is intermediate between Snapdeal and Flipkart and it would be investing a huge capital of $1.5 billion in order to get this merger agreed. SoftBank would be aiming to gain a market share of 15% in the Flipkart- Snapdeal merger deal. Currently, SoftBank owns 30% share in Snapdeal and the current valuation of Snapdeal is valued at $6.5 billion.
In addition, Tiger Global will be expected to sell 10% of its total stake of 30% in Flipkart sooner. If the merger is successfully carried out, then Tiger Global may increase its share to 20% in Flipkart. Flipkart’s current capital valuation is $11 billion and if the current funding round happens, then the capital may raise upto $2.5 billion.
Tiger Global holds a major share of stakes in leading E-commerce companies such as Quikr, ShopClues and Ola is now keen on investing big money on Flipkart. Tiger Global invested a massive $800 million worth of funds in Snapdeal.
Tiger’s investment in Snapdeal and Flipkart has given the investor a wide and new online market to expand its brand name. Hence, after a certain period, Tiger Global would be one of the leading investment companies across the globe.
In the year 2015, Flipkart’s valuation was calculated at $15.2 billion. The company is set to raise three different capital funds, with Microsoft pumping in $200 million and $700 million by the Chinese company Tencent.
With the arrival of SoftBank in Indian E-commerce business, it would give Flipkart a strong platform to grow as a company and achieve greater profits. The discussions about the merger have been in talks since February with the founder’s son directly involving in the discussion.