Why the Japanese investor will have to revisit its gambit of investing in the bellwethers of Indian ecommerce.
In 2017, Flipkart looked like a perfect fit for SoftBank’s outsized shopping bag. By then, Snapdeal, its maiden ecommerce bet in India, had started to flounder and Paytm Mall, the eponymous financial services provider’s ecommerce wing, barely registered a blip in a market dominated by Amazon and Flipkart. In short, SoftBank’s dream of recreating the Alibaba magic — SoftBank founder Masayoshi Son’s $25 million investment in Alibaba at the dawn of the millennium is worth close to $140 billion today, almost twice its $84 billion market cap—looked like a pipe dream.
Flipkart was the remedy to most of his problems. While the firm spent the better part of 2015 and 2016 dodging Amazon’s artillery, Flipkart was still India’s most valuable startup, valued at about $11 billion and the market leader by a fair margin. It was also scripting a turnaround under the leadership of Kalyan Krishnamurthy, an emissary of the firm’s largest shareholder, Tiger Global Management.
It looked like Flipkart could be the right bet to salvage some of SoftBank’s earlier misadventures in India, such as Snapdeal and Housing. Pat came the money from SoftBank’s $100-billion Vision Fund—a mammoth $2.5 billion cheque, the single largest funding round by a homegrown startup. SoftBank ended up owning close to one-fifth of Flipkart through a mix of primary and secondary transactions.
The deal was in line with Son’s vision to buy into the biggest businesses in promising markets. “We want to support innovative companies that are clear winners in India,” Son had said of the deal, which Flipkart co-founders Sachin Bansal and Binny Bansal had described as a “monumental moment”.
This story is from the June 8 2018 edition of Forbes India.
Start your 7-day Magzter GOLD free trial to access thousands of curated premium stories, and 8,500+ magazines and newspapers.
Already a subscriber ? Sign In
This story is from the June 8 2018 edition of Forbes India.
Start your 7-day Magzter GOLD free trial to access thousands of curated premium stories, and 8,500+ magazines and newspapers.
Already a subscriber? Sign In
Home-Cooked Meal Is Now Greatly Valued
The pandemic has also brought with it an improved focus on hygiene, use of technology in dining, rise of cloud kitchens and resurgence in popularity of Indian ingredients
Paytm 3.0 - Reaching Near Breakeven In Two Years
As of 2020, Vijay Shekhar Sharma’s super app for financial services had run up losses in thousands of crores. Now, as digital payments gets yet another boost courtesy Covid-19, he’s hopeful of reaching near breakeven in two years
THE PANDEMIC HAS CAUSED WOMEN GREATER LABOUR PAIN
Covid-19 has shown that women are more likely to face the brunt of job losses than men, and find fewer opportunities when they want to resume. That apart, several have to deal with increased hours of unpaid work at home and even domestic abuse
LEADERSHIP WILL BE ABOUT SEEING THE BIGGER PICTURE
Leaders must not only guard their teams first during a crisis, but also deal with stakeholders with respect and dignity. And apart from pursuing business goals, they should remain committed to our planet and the environment
PHILANTHROPY SHOULD BE HUMBLE, BUT NOT MODEST
Apart from building a flexible and resilient framework for the future, philanthropists, civil society and the government must work in tandem so that every rupee is absorbed on the ground
INTEGRATED HEALTH CARE, TECH WILL DISRUPT SECTOR
While clinical research will get a boost, having a skilled workforce and public spending on health care will be challenges in the near term
DIGITALISATION WILL HELP IN VALUE CREATION
As the pandemic brings technology and innovation to the core of business and daily life, the next decade will see about 150 million digital-first families in India
Industry 4.0: Climate Revolution?
Augmenting sustainability alongside digital capabilities is an economic, competitive and global opportunity for India’s businesses, but regulations need to reflect intent
EV Dream Still Miles Away
Electric vehicles have remained a buzzword in India for years. But not much has moved on ground due to high upfront costs, range anxiety and charging infrastructure
Living Waters
A virus has caused us to scramble for oxygen but our chokehold on the environment is slowly strangling the very waters that breathe life into us. The virus is a timely reminder: We are merely consumers, not producers of life’s breath on this planet
