"This is the biggest ever private investment in an Indian technology company", Flipkart said without disclosing the sum invested.
People familiar with the deal said the investment is worth USD 2.5 billion, with about USD 1.5 billion being directly funnelled into Flipkart and USD 1 billion for part of Tiger Global Management's stake.
The investment, which comes less than two weeks after Snapdeal dropped merger talks with its bigger rival, willswell Flipkart's cash holdings to more than Dollars 4 billion.
Having failed to secure some of Flipkart last month when its bid to acquire Snapdeal fell apart, SoftBank has now got its hands on the Amazon rival. Didi Chuxing has raised 5 Bn USD and increased its total fund to $15 Bn in April.
The investment is part of the previously announced financing round, where Flipkart had raised capital from three of the world's premier technology companies - Tencent, eBay and Microsoft. The two companies have been locked in an intense battle for leadership in the burgeoning Indian e-commerce market. However, K Vaitheeswaran, co-founder of India's first e-commerce company Fabmart (later IndiaPlaza), thinks more funding need not necessarily be a positive sign.
"This deal is monumental and is recognition of India's unparalleled potential to become a leader in technology and e-commerce on a massive scale", commented Binny Bansal and Sachin Bansal, co-founders of Flipkart.
"The funding round further solidifies Flipkart's balance sheet and will help accelerate investment in driving continued market leadership", it said.
Completion of the investment is subject to customary regulatory approvals and closing conditions. Very few economies globally attract such overwhelming interest from top-tier investors.
"India is a land of vast opportunities", Son said in a statement on Thursday. "We want to support innovative companies that are clear winners in India because they are best positioned to leverage technology and help people lead better lives". LLC served as financial advisor and Gunderson Dettmer LLP served as legal advisor to Flipkart.
SoftBank has an India portfolio spanning e-commerce, ride sharing, digital payments, hospitality, clean energy and telecommunications, which is valued at over $6 billion. Citi served as financial advisor and AZB and Partners served as legal advisor to the SoftBank Vision Fund.