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SoftBank and ADQ as potential investors of Flipkart - The Kick Start

Flipkart, a Walmart owned eCommerce company, is planning to seek voluntary financial contributions of almost $3 billion from investors like SoftBank, Canada Pension Plan Investment Board and Singapore’s GIC Pte. The fundraising is planned to be held before the IPO which has been pushed to 2022.

Abu Dhabi sovereign fund ADQ (formerly known as Abu Dhabi Developmental Holding Company), is also planning to invest almost $500 million in Flipkart. The deal is worth almost $40 billion according to many reports.

Pandemic has caused an increased rate of growth in the eCommerce sector. People are increasingly making online purchases due to the stay-at-home orders across the country. This change has caused SoftBank to invest in Flipkart once again. The pandemic induced trend in the sector of e-commerce has every chance to remain and this will only benefit both parties. SoftBank can invest up to $600 million through its Vision Fund II.

SoftBank finds investments in India as healthy and hence have invested in companies like Policybazaar, Paytm, Delhivery and Ola. Last month SoftBank had invested approximately $250 million in zeta, a banking technology startup. It has also invested in social commerce platform like Meesho with around $300 million.

SoftBank is ready to invest almost $4 billion in India across many sectors. It includes SVF2 investments like Lenskart, MindTickle and Unacademy.

ADQ is one of the most influential investors in the Middle East with an asset of approximately $110 billion. ADQ’s investment in agricultural trader Louis Dreyfus Company BV last year has brought greater significance to its position as a prominent investor in Flipkart.

Flipkart’s plan to raise funds before the IPO reveals that the company is looking forward to investing more in its growth. With the current trend in the eCommerce sector, Flipkart has the potential to expand and increase its revenue and business.

Walmart had acquired Flipkart in 2018. It has raised almost $9 billion in various fundraising rounds and is backed by investors like eBay, Tiger Global, Tencent, Axis Bank and SoftBank Investment Advisor.