MUMBAI--Indian online marketplace Snapdeal.com is close to raising around $600 million from Japan's SoftBank Corp. and other investors, according to two people with knowledge of the discussions.

Nikesh Arora, chief executive of SoftBank's Internet and media unit, may also make a personal investment in the eBay Inc.-backed Indian company, both people told The Wall Street Journal on condition of anonymity.

Representatives of both SoftBank and Snapdeal declined to comment.

The deal is likely to be announced within the next two weeks, the people said.

Snapdeal's fundraising comes as competition heats up in India's nascent and so far unprofitable e-commerce market. India's online marketplace, worth around $2 billion in sales right now, is expected to touch $30 billion by 2020, according to analysts.

To prepare for this growth, Snapdeal's larger rivals Flipkart Internet Pvt. and America's Amazon.com Inc. made huge investments in India this summer.

Amazon said it would invest $2 billion to expand its India operations, while Flipkart, India's largest homegrown e-commerce company by sales, said it had raised $1 billion from existing and new investors.

For SoftBank, which has been on an acquisition spree, the Snapdeal investment won't be its first in an e-commerce company. It owns around a third of Alibaba Group Holding Ltd., which raised $25 billion in an initial public offering in the U.S. last month.

SoftBank is also talking to other companies in India for potential investments, according to a person familiar with Mr. Arora's thinking.

If the Snapdeal investment goes through, SoftBank could end up becoming one of Snapdeal's largest investors.

In May, the Indian firm had raised $100 million from a group of investors including Singapore state investment company Temasek Holdings and American money-manager BlackRock Inc., in a round that valued the web site at roughly $1 billion.

In February, Snapdeal had raised more than $130 million from eBay and others.

Snapdeal, which runs a marketplace similar to eBay's in India, has more than 25 million users and is owned by Jasper Infotech Pvt. Ltd.

Write to Dhanya Ann Thoppil at dhanya.thoppil@wsj.com and Kenan Machado at kenan.machado@wsj.com

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