"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," SoftBank Corp Vice Chairman and CEO of SIMI Nikesh Arora said.

Arora will join the board of Snapdeal as part of the strategic investment.

Kunal Bahl, co-founder and CEO of Snapdeal, said that with the support of Softbank, the company is confident of further strengthening "our promise to consumers and create life changing experiences for 1 million small businesses in India."

Earlier this year, Snapdeal had raised USD 133.77 million in a round led by eBay and USD 105 million from institutional investors including Temasek, Myriad, Tybourne, Blackrock Inc. and Premji Invest.

Tata Sonds Chairman Emeritus Ratan Tata also made a personal investment into the company.

Morrison & Foerster LLP acted as legal advisor to SoftBank, with Kochhar & Co. Advising SoftBank on India law matters.

In July this year, Snapdeal rival Flipkart had announced a USD 1 billion funding, the largest to date in the fledgling e-commerce sector from Singapore's sovereign wealth fund, GIC, as well as existing investors including Tiger Global Management, Naspers, Accel Partners and Morgan Stanley Investment Management.

A day later, world's largest e-tailer Amazon said it will pump in USD 2 billion to bolster business in India.

A report by consulting firm Technopak pegs the USD 2.3 billion e-tailing market to reach USD 32 billion by 2020.

Another report by consultancy firm PwC and industry body Assocham suggests that e-commerce firms are expected to spend up to USD 1.9 billion by 2017-2020 on infrastructure, logistics and warehousing.

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