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Japan-based telecom and Internet giant SoftBank today said it has invested USD 627 million in homegrown online marketplace Snapdeal, a move which is further set to intensify the fiercely competitive e-commerce space in the world's second most populous market.
SoftBank, along with other investors, is also pumping in USD 210 million (about Rs 1,260 crore) in taxi services firm Ola.
The investments come a day after SoftBank announced its plans to invest a whopping USD 10 billion in India in coming years, making the country its "top most priority".
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This is the largest investment made by a single investor in an e-commerce company in India. Other existing investors have also participated in this round of investment but the company declined to disclose the amount.
SoftBank, run by Japan's richest businessman Masayoshi Son, seeks to tap the growing online market in India with this funding round.
Snapdeal will use the investments in expanding its chain of fulfilment centres and make acquisitions in the coming few months, specifically in the area of mobile technology.
The city-based e-commerce firm, which has so far raised about USD 1 billion this year, is already eyeing 3-4 firms, especially those in mobile technology.
Its co-founder Kunal Bahl told PTI: "We are looking at acquisition opportunities across sizes, ranging from less than USD 1 million to USD 100 million."
Besides, Snapdeal will open a R&D centre in Bangalore with 500 engineers in the next two weeks to work on platform innovation and areas like mobility, payments and supply chain.
SoftBank said it will become New Delhi-based Snapdeal's biggest investor but did not specify the exact quantum of stake it has bought in India's third-biggest online marketplace.
In a statement today, Ola (formerly Olacabs) said it has signed "a definitive agreement to raise USD 210 million (about Rs 1,260 crore) from SoftBank Internet and Media, Inc. (SMIC) and existing investors Tiger Global, Matrix Partners India and Steadview Capital."
SoftBank has also invested in mobile ad firm InMobi and has a joint venture with Bharti Enterprises in messaging app Hike.
"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," SoftBank Corp Vice Chairman and CEO of SoftBank Internet and Media, Inc (SIMI) Nikesh Arora said.
Arora will join the board of Snapdeal as part of the strategic investment.
Apart from the two present deals, Arora has also overseen SoftBank's USD 250 million investment in Hollywood movie studio Legendary Entertainment.
He was earlier the Chief Business Officer of US-based tech giant Google.
