SoftBank Bets Big On India With $627 Million Snapdeal Investment

(Photo: Bloomberg via Getty Images)

SoftBank announced on Monday that it was investing about $800 million in two different Indian companies in what looks to the beginning of massive 11-figure commitment to the country over the next few years.

The Japanese investment company and technology powerhouse saidit plunged $627 million round into online retailing marketplace Snapdeal and led a $210 million into taxi app and Uber competitor Ola Cabs. As the largest shareholder in Alibaba Group-the Chinese e-commerce giant that went public in September and now has a market value of more than $240 billion-SoftBank is hoping to find similar success in India, which has a largely underdeveloped internet economy.

'We believe India is at a turning point in its development and have confidence that India will grow strongly over the next decade,' said SoftBank Chairman Masayoshi Son in a statement. 'As part of this belief, we intend to deploy significant capital in India over the next few years to support development of the market.'

That capital commitment from the Japanese firm could be as much as $10 billion said the Indian government in a statement that came after Son, worth $16.8 billion based on FORBES' estimates, spent two days in the country meeting with political figures and technology executives. His company's investments into SnapDeal and Ola come only a week after SoftBank announced it led a $100 million round in Indonesian online marketplace company Tokopedia in a deal sourced by former Google executive and new SoftBank Vice Chairman Nikesh Arora.

Founded in 2010 by Kunal Bahl and Rohit Bansal, Snapdeal is one of India's largest e-commerce sites, with 25 million registered users and 50,000 vendors. Though it lags behind the country's main online retail player in Flipkart in terms of total sales, industry observers say its still very early days of Indian internet commerce. Forrester Research noted that it expects total online spending to total $3.2 billion in 2014, a figure that is expected to increase by more than fivefold by 2018.

Though it did not disclose its stake, SoftBank will become the largest shareholder in Snapdeal, which already counts eBay as a large investor. Arora will reportedly assume a board seat with the company. The $627 million in new funding should go a long way in arming Snapdeal against its closest competitors Flipkart, which announced $1 billion in funding from Tiger Global and Naspers in July, and Amazon.com , which has a $2 billion verbal commitment from CEO Jeff Bezos to invest $2 billion in India.

That kind of money shows just what the internet titans of the world think about the developing nation with more than 1.2 billion people.

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'India has the third-largest Internet user base in the world, but a relatively small online market currently,' said Arora in a statement. 'This situation means India has, with better, faster and cheaper Internet access, a big growth potential.'

Follow me on Twitter at @RMac18 or email me at rmac@forbes.com.

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