In India, SoftBank Tries, Tries Again
Son may lack the influence to guide Flipkart to a merger with the retail unit of Paytm, another Indian start-up
that is backed by Alibaba, the Chinese giant partly owned by SoftBank.
The Japanese conglomerate’s Vision Fund is investing $2.5 billion in the online retailer Flipkart,
effectively rendering worthless an earlier bet of nearly $1 billion on a rival start-up, Snapdeal.
It is Amazon’s main domestic rival in the battle for dominance of India’s online retail market,
which Forrester Research reckons will be worth $64 billion in annual sales by 2021.
Mr. Son’s company was the largest investor in Snapdeal, making bets at valuations worth up to $5 billion.
The decision to invest directly in Flipkart implies the Japanese company has given up on recovering value from the smaller company.
The Vision Fund, a $90-billion-odd investment vehicle managed by SoftBank, will now have a large but noncontrolling stake in Flipkart.
But Snapdeal represents the second time he has lost control of the founders of a prominent Indian start-up.