In an interesting turn of events, Japan's richest man Masayoshi Son's company Softbank is in talks to capture around a 20% stake (estimated around $1 to $1.5 billion) in both Flipkart and Paytm, as reported by Economic Times.
The move is interesting because in 2011, Flipkart wanted to rope in Softbank as an investor, which would have cost Son a few hundred million, rather than billions, for a similar stake. However, things didn't turn work out and Flipkart raised a funding round, led by South African media giant Naspers, in 2012 that valued it at $1billion.
Three years back, Son had invested $627m in Snapdeal but the result didn't meet expectations, a result of which is that they are now seeking a merger between Snapdeal and Flipkart. SoftBank plans to invest more than $1bn into the merged entity and is also in talks to invest a similar amount in Paytm.
India remains a lucrative market for Son as, according to a report from the Internet and Mobile Association of India and market research firm IMRB International, "The number of Internet users in India is expected to reach 450-465 million by June, up 4-8% from 432 million in December 2016."
The other big investor in Paytm is China's Alibaba group. According to commentators, both Softbank and Alibaba share a good relationship and want to co-exist, which is why they are eyeing a three-way merger. In 2000, SoftBank made an investment of $20 million in Alibaba. If the merger sees the light of the day, SoftBank will be one of the three largest investors in Paytm.