SoftBank Fund Is Said in Talks to Invest $2 Billion in Flipkart

(Bloomberg) -- SoftBank Vision Fund, the technology investor founded by Masayoshi Son, is in talks to invest directly in India's Flipkart Online Services Pvt, according to people familiar with the matter, after talks to fold SoftBank-backed Snapdeal into Flipkart fell apart.

The fund is looking at putting between $1.5 billion and $2 billion into the largest Indian e-commerce operator within the next two months, said one of the people, asking to not be identified as the discussions are private. About half the money would go to Tiger Global Management, which wants to sell part of its Flipkart stake, while the rest of the funds would go to Flipkart, the person said.

The Vision Fund was founded by Son, chairman of SoftBank Group Corp., but operates as a separate entity. The prospective Flipkart investment comes after Snapdeal, which was backed by SoftBank directly, on Monday spurned a merger proposal from Flipkart to pursue a future as a standalone company. The Japanese company has largely written off its investment in Snapdeal.

Flipkart was valued at $11.6 billion in April after EBay Inc., Tencent Holdings Ltd. and Microsoft Corp. together invested $1.4 billion. Adding investment from the deep-pocketed Vision Fund would help the Indian company compete with Amazon.com Inc., which has said it plans to invest at least $5 billion in its India operations.

SoftBank has been an enthusiastic supporter of e-commerce in developing markets. The company's investment in Alibaba Group Holding Ltd. started with $20 million in 2000. Its stake in the Chinese company is now worth more than $100 billion.

Flipkart did not respond to an email seeking comment while a SoftBank spokeswoman declined to comment saying SoftBank Vision Fund independently evaluates each investment on its own merit.

--With assistance from Giles Turner

To contact the reporter on this story: Saritha Rai in Bangalore at srai33@bloomberg.net.

To contact the editors responsible for this story: Robert Fenner at rfenner@bloomberg.net, Peter Elstrom