Japanese telecom and media group SoftBank Corp has agreed to buy a $627 million stake in Indian online retailer Snapdeal, seeking to tap into potentially huge e-commerce growth in the market with the world's third-biggest Internet user base.
Highlighting India as a new priority in its aggressive expansion, SoftBank said on Tuesday it's also leading a $210 million round of investment in an Indian logistics business in a separate deal.
The cash-rich Japanese company made waves with its plans to grow outside its home base last year when it bought No. 3 US mobile carrier Sprint Corp for $21.6 billion.
SoftBank said it will become New Delhi-based Snapdeal's biggest investor, but officials at the Japanese company declined to say immediately how big the stake in India's third-biggest online marketplace will be.
The investment in Snapdeal is the largest in India's growing e-commerce sector since industry leader Flipkart raised $1 billion in July.
Snapdeal has more than 25 million registered users and more than 50,000
business sellers, according to a statement by SoftBank.
The Snapdeal investment was announced alongside SoftBank Internet and Media Inc's lead in a $210 million investment with existing investors in Indian transportation aggregator ANI Technologies Pvt. Ltd.
SoftBank didn't specify how much it was investing in ANI, which operates a mobile application for cab booking.
Both deals were negotiated under newly appointed SoftBank Vice chairman and SIMI chief executive Nikesh Arora, reflecting the company's recent aggressive overseas expansion.
"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," Arora, a former Google executive, said in a statement.
Arora will be joining both Snapdeal and ANI's boards as part of the investment, SoftBank said.
In one of its highest profile investments since buying Sprint, SoftBank said earlier this month it was taking a minority stake in Hollywood movie studio Legendary Entertainment for $250 million.