Japanese conglomerate SoftBank Group is seeking to invest $5 billion to $10 billion in India, said SoftBank Investment Advisers CEO Rajeev Misra while addressing Bloomberg’s 6th edition of the “India Economic Forum 2021.”
For over a decade, the Japanese investment giant has pioneered investments in the Indian startup ecosystem through its Vision funds, with its first investment amounting to $200 million in InMobi.
Masayoshi Son-led holding company, in 2014 outlined a target of investing $10 billion in Indian startups by 2024. However, in the last five years, it has devoted over $8 billion to India, putting it on the trajectory to accomplish its target much sooner than expected.
It has already invested $3 billion in Indian startups this year, marking the latest opportunistic push by a top investment group in the South Asian nation, where young startups have raised a record $20 billion this year.
SoftBank might invest up to $10 billion if possible outcomes are good “at right valuations,” despite cutting smaller cheques than before, according to Misra. He noted that, in contrast to its investments in Paytm, OYO, and Flipkart, which each received almost $1 billion in cheques, SoftBank injected $3 billion across 24 startups, with an average ticket value of $125 million.
Adding further he said, “The quantum of capital we are able to invest today is not as high because the founders are not raising as much money. They’re raising $150 million to $300 million. So, each investment is roughly $200 million to $300 million. We have a local office, which is working hard and building relationships with the young entrepreneurs and building these relationships six months or a year before they need capital.”
B2B SaaS, fintech, and ed-tech, according to Misra, are the most promising investment opportunities. SoftBank claims to be betting on globally scalable B2B firms centered around HR and sales quality among the SaaS startups shortlisted. SoftBank was looking to invest in two more fintech startups, he said because financial inclusion is critical in India.
It has already invested in Paytm and Policybazaar – the 2 IPO-bound fintech startups alongside ed-tech unicorn Unacademy and Eruditus. SoftBank-backed fintech giant closed its initial public offering (IPO) with a nearly 2x subscription. Apart from Policybazaar, Lenskart, Delhivery, InMobi, Ola, and OYO are among SoftBank’s existing and exited portfolio firms that will be listed on public markets shortly.
Misra’s statements came amid Softbank Group reported quarterly losses, with its Vision Fund division losing $10 billion due to a drop in share prices for portfolio companies affected by Beijing’s tech crackdown. Softbank announced earlier this week that it would spend up to $8.8 billion over the next year to buy back up to 14.6 percent of its outstanding shares.