With an aim to tap into potentially huge e-commerce growth in the market with the world's third-biggest Internet user base, Japanese telecom and media group, SoftBank Corp (9984.T) has agreed to buy a $627 million stake in Indian online retailer Snapdeal, according to Reuters report.
Highlighting India as its new priority in aggressive expansion, SoftBank revealed that it is also leading a $210 million round of investment in an Indian logistics business in a separate deal. The cash-rich Japanese company made waves with its plans to grow outside its home base last year when it bought No. 3 U.S. mobile carrier Sprint Corp (S.N) for $21.6 billion.
SoftBank said it will become biggest investor of the New Delhi-based Snapdeal, without revealing the exact estimate of how big their stake would be in India's third-biggest online marketplace.
After Flipkart raised $1 billion in July, the investment in Snapdeal is the largest in India's growing e-commerce sector since industry leader. The brand has more than 25 million registered users and more than 50,000 business sellers, according to a statement by SoftBank.
The Snapdeal investment was announced alongside SoftBank Internet and Media Inc's (SIMI) lead in a $210 million investment with existing investors in Indian transportation aggregator ANI Technologies Pvt. Ltd. SoftBank didn't specify how much it was investing in ANI, which operates a mobile application for cab booking.
Both deals were negotiated under newly appointed SoftBank Vice chairman and SIMI chief executive Nikesh Arora, reflecting the company's recent aggressive overseas expansion.
Arora, a former Google executive, noted in a statement, "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.”
Meanwhile, SoftBank unvealed, Arora will be joining both Snapdeal and ANI's boards soon as part of the investment.