Japan’s telecommunications company SoftBank Corp. is going all out to grab a chunk of India’s burgeoning Internet-driven consumer business sector. The company announced two large investments in Indian startups on the same day.
SoftBank will invest $627 million in India’s online shopping company Snapdeal and lead a $210 million investment in ANI Technologies, which operates taxi service startup Ola Cabs, SoftBank said, in separate statements, on Tuesday.
“We believe India is at a turning point in its development and have confidence that India will grow strongly over the next decade ... we intend to deploy significant capital in India over the next few years,” SoftBank Chairman and CEO Masayoshi Son said in a statement.
The investment in Snapdeal will make SoftBank the largest investor in the four-year-old online marketplace, which has some 50,000 businesses selling to more than 25 million registered users, according to the statement on Snapdeal.
Three-year-old Ola’s service taps 33,000 cabs across 19 major cities in India, and Ola's existing investors have also participated in this round, according to Softbank's statement on Tuesday.
India’s rapidly growing online shopping market is estimated to grow more than four-fold to $8.5 billion in 2015 from $2 billion in 2013, and the number of shoppers online are expected to double to about 40 million in the same period, according to private equity company Accel Partners, which is an investor in Snapdeal’s rival, Flipkart.
Flipkart, India's largest online retailer, raised $1 billion in its latest round of investments in July while Amazon.com Inc CEO Jeff Bezos has said that America’s largest online retail company will invest $2 billion in its Indian operations.
Nikesh Arora, vice chairman of SoftBank and a former Google Inc. senior vice president, will join the boards of both Snapdeal and ANI Technologies. Morrison & Foerster LLP acted as legal advisor to SoftBank, with Kochhar & Co. advising SoftBank on Indian law, according to the statement.