Expanding Investment Into the Indian Startup Market
The Japanese business giant has invested in several Indian startup companies, including logistics company Delhivery, payments startup Paytm, Policybazaar, and others. The company has also invested between $200 and $250 million in the electric ride-hailing company Ola Electric, as well as a minimum of $250 million business investment in the fintech company Zeta.
Additionally, Softbank has already poured $250 million into the social commerce business Meesho which reached a post-money business valuation of more than $2 billion. Overall, Softbank has invested over $1 billion in the Indian startup market so far.
“SoftBank has become quite aggressive given the current scenario. These investments (mentioned above) will close in the current quarter itself and some more could be there later in the year,” the Times of India cited a person familiar with the matter.
Masayoshi Son, the CEO of the tech-investing company, recently compared his company to a “goose” giving “golden eggs,” referring to a number of companies SoftBank invested in, which are looking to go public soon.
He said he expects 10 to 20 of SoftBank’s portfolio companies to launch IPO (initial public offerings) within a year, with companies like Delhivery and Policybazaar already working on their IPOs.
SoftBank has poured $8 billion into the local digital economy in India via its “Vision Fund 1” and “Vision Fund 2” portfolios. The company had previously invested $2.5 billion in Flipkart and sold it for $4 billion to Walmart in 2018.
The “Vision Fund 2” is reportedly close to agreeing to a business investment of around $500 million into the Indian food delivery company Swiggy, which raised $800 million earlier this month. If the business investment goes through, it could take the business valuation of the food delivery company up to $5.5 billion.
SoftBank was looking to invest in either Swiggy or Zomato and decided to back Swiggy earlier this week, according to TechCrunch. The Swiggy investment doesn’t come as a surprise as India’s food delivery market is expected to hit $12 billion in valuation by 2022, according to analysts at Bernstein.
The $800 million funding round “gives us a lot more firepower than the planned investments for our current business lines. Given our unfettered ambition though, we will continue to seed/experiment new offerings for the future that may be ready for investment later,” Swiggy co-founder and chief executive Sriharsha Majety said.
SoftBank’s investing spree in the Indian startup market comes at a time when US hedge fund Tiger Global also adopted a similar approach. Tiger Global is known as an ardent supporter of the Indian tech startup market. The New York-based hedge fund has infused over $590 million in the local startup market so far and plans to back a few more in the near future.
Softbank has invested more than $1 billion into India's tech startup market in the first quarter of this year, which doesn’t include a near-completed $500 million investment in the food delivery startup Swiggy.