Bengaluru: SoftBank Vision Fund has bought stake worth at least $2.6 billion in Flipkart Ltd, in a deal that provides a part exit to some of the e-commerce company’s investors, boosts the ability of India’s largest internet firm to take on arch-rival Amazon India, and gives SoftBank a piece of India’s most valuable start-up.

The latest round of funding takes Flipkart’s cash reserves to more than $4 billion. Flipkart didn’t disclose the amount, but SoftBank invested roughly $1.4 billion directly in Flipkart, three people familiar with the matter said on condition of anonymity.

SoftBank will also buy Flipkart shares worth $1.2-1.4 billion from Tiger Global Management, Accel Partners, IDG Ventures and Flipkart co-founders Sachin and Binny Bansal, among others, the people cited above said. Flipkart’s largest investor, Tiger Global—whose representative Kalyan Krishnamurthy is the company’s CEO—will get a majority of the $1.2-1.4 billion from SoftBank, the people said.

Flipkart has now raised more than $6 billion in cash since starting out in 2007, by far the highest by any Indian start-up and among the highest by any start-up globally. Flipkart, which also owns fashion retailers Myntra and Jabong as well as mobile payments firm PhonePe and eBay’s India platform, had raised $1.4 billion from Tencent Holdings Ltd, eBay Inc. and Microsoft Corp. in April.

The SoftBank investment comes after Flipkart’s proposed takeover of Snapdeal, the Japanese investor’s portfolio company, collapsed last week.

“This is a monumental deal for Flipkart and India. Very few economies globally attract such overwhelming interest from top-tier investors. It is recognition of India’s unparalleled potential to become a leader in technology and e-commerce on a massive scale. SoftBank’s proven track record of partnering with transformative technology leaders has earned it the reputation of being a visionary investor," Binny Bansal and Sachin Bansal said in a joint statement.

The investment will likely make SoftBank the largest investor in Flipkart along with Tiger Global, whose influence on the firm’s board will diminish. Both SoftBank and Tiger will end up owning 20-25% in Flipkart after the deal, the people cited above said.

Mint reported on 11 July that the SoftBank-Flipkart deal may see the return of Sachin and Binny Bansal to more prominent positions at Flipkart. While the company’s official position all along has been that the Bansals were always involved at the company, it has been clear to most people that starting January 2017, when Krishnamurthy was named CEO of Flipkart, he and Tiger Global have been in charge.

With SoftBank’s entry, Binny, in particular, as well as Sachin will play a more active role at Flipkart, the people cited above said. Flipkart will also end up with five strong voices on its board: SoftBank, Naspers-Tencent, Tiger Global, Accel and the Bansals. This is a break from the past when Tiger Global’s Lee Fixel, Flipkart’s godfather, was by far the most powerful voice on the company’s board since he first invested in Flipkart in November 2009.

Kabir Misra, managing partner at SoftBank Capital, may join Flipkart’s board as SoftBank’s representative, two other people familiar with the matter said.

For SoftBank, the deal with Flipkart represents a reversal in its India portfolio. Three months ago, its largest investment was Snapdeal. Now, the Snapdeal bet has proved to be a washout and SoftBank is the largest shareholder in two Snapdeal rivals, Flipkart and Paytm. These two deals, which amount to more than $4 billion, have changed the dynamics of India’s internet business and made the Japanese investor the most powerful and influential entity in the start-up ecosystem. In May, SoftBank, which is also the largest shareholder in cab hailing firm Ola, invested $1.4 billion in Paytm.

Already, some analysts and investors are saying that SoftBank may orchestrate a mega-merger between Paytm and Flipkart at some point in the future.

“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. As the pioneers in Indian e-commerce, Flipkart is doing that every day," said Masayoshi Son, chairman and CEO of SoftBank Group Corp.

While expectations around the size of India’s e-commerce have significantly diminished from the heady estimates of 2015, it is still considered the last big e-commerce market left. Flipkart is the only local start-up that is seen as serious competition to Amazon India over the long term.

With its financing round in April and the latest SoftBank investment, Flipkart has settled the debate over its ability to take on Amazon. Its prospects have also lifted over the past nine months as it has seen a resurgence in sales.

Goldman Sachs served as financial advisor and Khaitan & Co. and Gunderson Dettmer served as legal advisors to Flipkart in the SoftBank deal. Citi served as financial advisor and AZB & Partners served as legal advisor to the SoftBank Vision Fund.

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