Japan’s SoftBank Group Corp. (TYO:9984) said on Wednesday it is selling its roughly 20% stake in Indian e-commerce firm Flipkart to Walmart Inc. (NYSE:WMT).
A spokesperson for SoftBank on Wednesday told the Financial Times in Tokyo the company would sell its entire stake in the Indian retailer but did not provide further details.
Earlier this month, Walmart agreed to pay around US$16bn for a roughly 77% controlling stake of Flipkart, in a deal that puts it head to head with Amazon.com Inc. (NASDAQ:AMZN).
Flipkart currently controls nearly 40% of India’s online retail market, ahead of Amazon, according to researcher Forrester.
Read: Walmart trounces Amazon in the $15bn battle for Flipkart
Japanese telecoms and internet firm Softbank invested US$2.5bn in Flipkart, last August via its Vision Fund. It did not disclose terms of the sale, but this month Softbank CEO and founder Masayoshi Son said his investment in the Indian firm was worth around US$4bn.
In 2016, Masayoshi Son launched the Vision Fund that is now busy gobbling up stakes in the world’s most exciting young companies. It is disrupting both the industries in which it invests and other suppliers of capital.
Softbank did not comment on its reasons for cashing out after accumulating a more than 20% stake in Flipkart by buying shares from many minority shareholders. “The Flipkart exit comes far more quickly than SoftBank's average investment duration of 13.5 years,” pointed out Reuters.
VCCircle said it was a “far quicker exit for a PE fund,” which typically stays invested in a portfolio company for five to seven years.
Including Flipkart, SoftBank had pumped in over US$6bn into Indian companies including online grocer Grofers, cab-hailing firm Ola, hotel rooms aggregator OYO and the parent of e-commerce firm Paytm, reported VCCircle.
Succeed or fail, Masayoshi Son is changing the world of technology investing. According to reports, the Vision Fund which has a war chest of war chest of US$93bn has invested $30 billion in startups in the last year. Son is fast emerging as the most powerful investor in the tech world.
Ebay, Naspers also cashing out
Apart from SoftBank, Flipkart’s other investors that are selling their stakes to Walmart Include venture capital firm Accel Partners, New York investment firm Tiger Global, South African tech conglomerate Naspers and US-based online retailer eBay Inc (NASDAQ:EBAY). Naspers sold its entire 11.18% stake to Walmart for US$2.2bn while eBay, which had invested in Flipkart only last year, is cashing out for US$1.1bn.