Mumbai: After ploughing about $2 billion into minority stakes in Indian e-commerce businesses over the past few years, Japan’s SoftBank Group Corp. is upping the stakes, looking to play consolidator and take a more active role at a trio of leading start-ups.
According to persons with direct knowledge of the matter, the solar-to-tech conglomerate is seeking to secure a piece of India’s industry leaders in everything from payment systems to online shopping and groceries, in a series of deals that would shake up the $65 billion sector.
Among the most high-profile plans is SoftBank’s push to engineer Snapdeal sale to Flipkart, the leader of one of the world’s most competitive online retail markets. The deal could be finalized as soon as next week, one of the persons said.
SoftBank has poured roughly $1 billion into Snapdeal since 2014, but competition in e-commerce has risen dramatically with US giant Amazon.com Inc. cranking up its presence and taking the No. 2 spot from Snapdeal.
Besides Snapdeal, (run by Jasper Infotech Pvt. Ltd), SoftBank is also close to finalizing a cash infusion of more than $1 billion into Alibaba-backed digital payments firm Paytm (One97 Communications Pvt. Ltd)—leader in the fintech sector—giving it a more direct say in that group too, according to one person familiar with discussions.
Media reports have separately linked SoftBank to a tie-up between grocery delivery group Grofers, in which it has invested roughly $70 million, and market leader and rival BigBasket.
SoftBank, Snapdeal, Paytm and BigBasket did not respond to requests for comment. A spokesman for Grofers said the company did not comment on merger speculation.
Meanwhile, SoftBank poured cash into Snapdeal, but Son began to lose patience as it was outpaced by Amazon, said a person at Snapdeal and the person familiar with SoftBank’s aspirations.
SoftBank has already begun talks with Flipkart’s largest investor, Tiger Global, to buy a stake, the two persons said.
To push through the tie-up, SoftBank was likely to invest about $1 billion in Flipkart, both via a direct cash infusion and by buying equity stakes in investors such as Tiger Global, another person said, adding that Snapdeal investors were expected to get one Flipkart share for every 10 Snapdeal shares.
Still, a Flipkart-Snapdeal combine is likely to revive hopes of a broader consolidation in Indian e-commerce.