Japan based telecom and media giant Softbank Corp plans to invest $10 billion in India and to kick-start this pledge, the company inked a deal with Indian online retail giant SnapDeal with investments of $627 million in the company.
The deal comes after Prime Minister Narendra Modi’s Japan visit in September to attract the foreign investments in the country and boost the Indian economy.
“The visit of Prime Minister Narendra Modi to Japan has created a climate of hope and optimism about greater economic cooperation between the two countries,” said SoftBank chairman and CEO Masayoshi Son.
The investment comes on the same day that SoftBank is also confirming a $210 million investment in another Indian startup, Olacabs.
Both the deals were brokered by ex-Google honcho and now Softbank Internet and Media’s chief executive Nikesh Arora who also finds a seat among the SnapDeal board of directors.
“India has the third-largest Internet user base in the world, but a relatively small online market currently. This situation means India has, with better, faster and cheaper Internet access, a big growth potential. With today’s announcement SoftBank is contributing to the development of the infrastructure for the digital future of India,” said Arora.
Founded in 2010, the company also claims to have more than 25 million registered users and more than 50,000 business sellers. Earlier this year, Snapdeal had raised $133.77 million in a round led by eBay and $105 million from institutional investors including Temasek, Myriad, Tybourne, Blackrock Inc. and Premji Invest. Tata Sons Chairman Emeritus Ratan Tata also made a personal investment into the company.
SnapDeal co-founder and CEO, Kunal Bahl said, “With the support of Son-San and Nikesh, we are confident we will further strengthen our promise to consumers and create life changing experiences for 1 million small businesses in India. SnapDeal has the potential to become Alibaba of India.”
Morrison & Foerster LLP acted as legal advisor to advising SoftBank on India law matters.