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SoftBank plans to invest $10 billion in online ventures in India, with $837 million in deals already announced as the Japanese Internet giant that recently took a $250 million stake in Legendary Pictures continues its global spending spree.
A $627 million investment in Indian ecommerce platform Snapdeal and a $210 million stake in Uber-like taxi venture Ola Cabs were negotiated by Indian-born Nikesh Arora, head of Silicon Valley-based subsidiary SoftBank Internet and Media, who also led the recent Legendary deal.
“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,” said Arora in a statement.
SoftBank CEO and founder Masayoshi Son, Japan’s richest man, met with pro-business Indian Prime Minister Narendra Modi on Monday in New Delhi. Modi was elected earlier this year on a platform of opening up India to foreign investment and cutting some of its notorious red tape.
A spokesperson for the Indian government released a statement saying that Son had, “placed it on record that India is the top most priority for SoftBank.”
India’s online retail market is currently seeing a frenzy of investments as competition heats up between local players, such as Flipkart, and global giant Amazon. Recently, Amazon founder Jeff Bezos visited the country and announced a $2 billion investment plan for Amazon India. That followed Flipkart’s earlier announcement that the e-tailer had raised $1 billion in fresh funding from a mix of investors including Morgan Stanley.
A report by consulting firm Technopak pegs the $2.3 billion Indian e-tailing market to reach $32 billion by 2020. But that still pales in comparison to China which clocked around $300 billion in online sales in 2013.
Flush with cash from its super-successful early investment in Chinese ecommerce giant Alibaba, more international acquisitions by SoftBank are almost certainly on the cards as Son pushes ahead with his 300-year plan for the company.
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Portia de Rossi
James Gordon Meek