Flipkart's The Big Freedom Sale is ending today. However, it has got another reason to come up with more billion day sales for you. The Japan-based Softbank's Vision Fund has made the largest ever infusion of USD 2.5 billion in India's e-tailer firm.
After the new investment, Flipkart will have more than USD 4 billion cash reserve which may allow the e-commerce giant to expand its consumer base by offering mega discounts through its periodic sales.
Flipkart co-founders Binny Bansal and Sachin Bansal called it a monumental deal for the company and India. They said: "Very few economies globally attract such overwhelming interest from toptier investors. SoftBank's proven track record of partnering with transformative technology leaders has earned it the reputation of being a visionary investor."
SoftBank's investment was was part of a recent financing round where Flipkart raised USD1.4 billion from Chinese Internet giant Tencent Holdings Ltd, US online retailer eBay and global software giant Microsoft. The addition of USD 2.4 billion takes the total amount the company has raised so far to USD 7.4 billion, the maximum amount mobilised by any domestic online platform.
With latest round of funding, Flipkart now has enough financial resources to compete with arch rival Amazon. Both the companies have been locked in an intense battle for leadership in the fast-growing Indian e-commerce market.
Amazon and Flipkart have been pumping in millions of dollars to bring more sellers and buyers online. Earlier this year, global e-tailing giant Amazon invested over USD 310 million in India. The aggressive funding was made to consolidate its position in the country and fend off local rival Flipkart.
The US-based firm pumped in Rs 1,680 crore in June into its online marketplace business in India, while Rs 341 crore was invested in the preceding month in the wholesale business.
As per regulatory filings with the Corporate Affairs Ministry, Amazon Corporate Holdings and Amazon.com has made these investments in the two Indian entities. Last year, Amazon founder Jeff Bezos had committed investments to the tune of USD 5 billion into the Indian market. Estimates suggest that the company has already invested over USD 2 billion in the last few quarters in the Indian market.