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Japanese telecom and media group
SoftBank Corp has set its sights on Indian e-commerce
in its aggressive expansion drive, saying it will invest about
$10 billion in the booming sector as it took a strategic stake
in one of its rising stars.

Masayoshi Son, chief executive of SoftBank, laid out a
10-year investment plan for India on Tuesday, starting with the
purchase of a $627 million stake in fast-growing online
marketplace Snapdeal. Son's global ambitions flared into public
view last year when SoftBank bought No. 3 U.S. mobile carrier
Sprint Corp for $21.6 billion.

The Snapdeal purchase comes as international investors hunt
deals in online retail in India, which has the world's
third-largest Internet user base but where e-commerce is still
relatively underdeveloped. For cash-rich SoftBank, owner of a
third of newly listed Chinese e-commerce giant Alibaba,
the move is the latest in a series of deals designed to counter
sluggish growth at home.

"I have a strong willingness to invest more like $10 billion
in the next 10 years," Son said in an interview on Indian CNBC
after his company announced plans to buy in Snapdeal, which
connects small businesses with customers in an online
marketplace. "I strongly believe that Snapdeal has the potential
to be like the Alibaba of India."

In a separate deal announced on Tuesday, SoftBank said it
will lead a $210 million investment round with existing
investors in ANI Technologies Pvt. Ltd, which owns a mobile
application for taxi bookings that competes with the likes of
Uber.

SoftBank didn't disclose how big a stake it will have in
Snapdeal, which will use funds to expand operations to compete
with bigger, free-spending rivals Flipkart.com and Amazon.com
.

The company did say it will become the biggest investor in
Snapdeal, where sales of everything from clothes to computers
have brought in around 25 million registered users and
50,000-plus merchants, attracting international shareholders
like e-commerce operator eBay Inc and investment firm
BlackRock Inc.

One person with knowledge of the deal told Reuters SoftBank
will own about 30 percent of New Delhi-based Snapdeal, buying
new shares in the firm, valuing all of Snapdeal at around $2
billion. Snapdeal declined to comment on the terms of the deal.

"SoftBank is a major investor in the internet space and them
putting in a large sum of money validates the growth of Indian
e-commerce," said Niren Shah, managing director at venture
capital firm Norwest Venture Partners.

FLIPKART, AMAZON PUSH

Pressure had been growing on Snapdeal to raise funds to
compete as online retail surges in India, with local industry
leader Flipkart raising $1 billion in July, and global
e-commerce giant Amazon.com pledging to invest a
further $2 billion in its India unit.

The SoftBank investment is in line with the $600
million-$650 million sources told Reuters Snapdeal had been
seeking, and is the biggest investment by a single investor in
the e-commerce sector in India.

With this round of investment, Snapdeal, founded by Kunal
Bahl and Rohit Bansal four years ago, has raised about $1
billion this calendar year. The company said it plans to use the
money to ramp up technology and supply chain management systems,
and add order fulfilment centres to 30 cities. The company
currently has 40 fulfilment centres in 15 cities.

Snapdeal will also look at making three or four bolt-on
acquisitions in the coming few months specifically in the area
of mobile technology and set up an incubation centre to work
with start-up businesses in the mobile technology space, the
company said.

CEO Bahl, who has said he also wants Snapdeal.com to become
"the Alibaba of India", told Reuters in September that the
company was focusing on improving its technology platform so
that it could connect more small-scale enterprises with buyers.
Snapdeal plans to expand its merchant base to 1 million in the
next three years.

ARORA RISING

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.

The India growth plan rolled out by SoftBank on Tuesday
doesn't indicate the company will take its eye off other
investment openings.

Earlier this month it announced plans to lead a $100 million
investment in Indonesian e-commerce giant PT Tokopedia. 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.


(Additional reporting by Teppei Kasai in TOKYO; Editing by
Kenneth Maxwell)

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