SoftBank confirms Flipkart stake sale in first known exit from Vision Fund
Photo Credit: Reuters

Japanese telecom and Internet conglomerate SoftBank Group Corp has confirmed it will sell its entire stake in Indian online retailer Flipkart to US-based Walmart Inc.

In an email to VCCircle, a SoftBank spokesperson said, “We confirm the sale.”

The spokesperson didn't give any details of the sale but SoftBank CEO Masayoshi Son had recently said that its $2.5 billion investment in Flipkart had grown to $4 billion.

The stake sale marks the first known exit for SoftBank from its $93 billion Vision Fund, the world's biggest private equity fund. It is also a far quicker exit for a PE fund, which typically stays invested in a portfolio company for five to seven years.

The Vision Fund had invested about $2.5 billion in Flipkart in August last year after a failed attempt to orchestrate a merger with rival online retailer Snapdeal. SoftBank had accumulated a more than 20% stake in Flipkart by buying shares from many minority shareholders.

Earlier this month, Walmart agreed to buy about 77% of Flipkart for $16 billion.

SoftBank CEO Masayoshi Son was the first to confirm Walmart’s buyout of Flipkart publicly. However, there was uncertainty about whether SoftBank itself was selling its stake.

The Economic Times first reported SoftBank's confirmation on the stake sale earlier on Wednesday.

Including Flipkart, SoftBank had pumped in over $6 billion into Indian companies. Its India portfolio also includes online grocer Grofers, cab-hailing firm Ola, hotel rooms aggregator OYO and the parent of e-commerce firm Paytm.

Apart from SoftBank, Flipkart’s other investors that are selling their stakes to Walmart include venture capital firm Accel Partners, New York-based investment firm Tiger Global, South African tech conglomerate Naspers and US-based online retailer eBay Inc. Naspers sold its entire 11.18% stake to Walmart for $2.2 billion while eBay, which had invested in Flipkart only last year, is cashing out for $1.1 billion.

Leave Your Comment(s)