SoftBank Group, a Japanese conglomerate, plans to invest $5 billion to $10 billion in India, said SoftBank Investment Advisers CEO Rajeev Misra at Bloomberg’s 6th edition of the “India Economic Forum 2021.”
Through its Vision funds, the Japanese investment giant has invested in the Indian startup ecosystem for over a decade, with its first investment amounting to $200 million in InMobi.
By 2024, the Masayoshi Son-led holding company expects to invest $10 billion in Indian startups. It has nevertheless committed over $8 billion to India in the last five years, putting it on track to achieve its target much sooner than expected.
Three billion dollars has already been invested in Indian startups this year, marking a top investment group’s opportunistic push in the South Asian nation, where young startups have raised a record $20 billion this year.
According to Misra, SoftBank may invest as much as $10 billion if the outcomes are good “at right valuations,” despite cutting smaller checks than before. Unlike 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.”
Misra believes that B2B SaaS, fintech, and ed-tech are the most promising investment opportunities. Among the SaaS startups shortlisted by SoftBank, the company claims to be betting on globally scalable companies focused on HR and sales quality. SoftBank is looking to invest in two more fintech startups because financial inclusion is critical to India.
In addition to Unacademy and Eruditus, it has invested in Paytm and Policybazaar, two IPO-bound fintech startups. The SoftBank-backed fintech giant closed its initial public offering (IPO) with nearly two times as many subscriptions as expected. 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 as 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 stated earlier this week that it would buy back up to 14.6% of its outstanding shares for up to $8.8 billion over the next year.