SoftBank, a Japan-based telecom and Internet giant declared on Monday that it has invested $627 million in Snapdeal, India’s third biggest online marketplace. The announcement was made a day after SoftBank declared it would invest $10 billion in India in the next few years making India its topmost priority. This is the largest investment made by a single investor in an Indian e-commerce industry. The company, run by Masayoshi Son, Japan’s richest businessman, wants to tap the potential of the growing online market in India.
The investment will be utilized by Snapdeal to expand its chain of order fulfillment centers and to increase its technical and supply chain management systems to compete with rivals Amazon.com and Flipkart.com. The company wants to buy firms dealing in mobile technology and has shown interest in some other firms across varying ranges less than $ 1millon to $100 million. With this investment four-year-old Snapdeal, co-founded by Kunal Bahl and Rohit Bansal, raised about $ 1 billion this year.
Besides, Snapdeal will open a R&D centre in Bangalore soon with 500 engineers to work in areas like payments, mobility, and supply chain. Softbank said it will be Snapdeal’s biggest investor but refused to divulge how much stake it will have in the company. Though India has the third largest internet user base, its online market at present is small. SoftBank‘s investment improves the situation for India and shows that it has a lot of growth potential, said Nikesh Arora, the SoftBank Corp vice chairman and CEO of SoftBank Internet and Media Inc. Arora will join Snapdeal as part of its strategic investment team.
SoftBank has also invested in mobile Ad firm InMobi and has a joint venture with Bharti Enterprise. It is also pumping in $210 million in taxi services firm Ola.