This article is written by Amresh Tiwari, pursuing a Diploma in M&A, Institutional Finance and Investment Laws (PE and VC transactions) from lawsikho.com.
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A Japanese multinational investor Mr. Masayoshi Son ventured to establish a financial and investment company Softbank Group Corp in Japan on 3rd September 1981 with a vision to provide funding to startups which have potential to succeed in the long term business. It has arrangements to provide funds under the Vision Funds, the world’s largest technology focused venture capital funding facility with over $100 billion in capital. Softbank Vision Fund has funded Ola, Uber, Alibaba, Snapdeal, Yahoo Japan, Hike, PayTm and many more in different parts of the world.
Softbank Group is led by its founder Mr. Masayoshi Son and growing exponentially. The company has funded and owned businesses in varied areas such as e-commerce, internet, technology services, finance, media and marketing, broadband, fixed-line telecommunications, semiconductor design and other businesses. Softbank is recognized by Forbes Global 2000 list with 36th position in global ranking, also its 2nd largest Japanese publicly traded company.
SoftBank’s investment in India
In a time span of around 5 years under the leadership of Masayoshi Son Softbank has invested around $8 billion dollars in India since its inception from 2014. The target of Softbank by 2024 is to infuse $10 billion dollars in various sectors in Indian market and it could be witnessed that it will achieve the target earlier than the expected time frame.
“In an earlier statement given by Masayoshi Son, he recited that SoftBank will achieve its target much ahead of the stipulated timeline with proportionally bigger volume”.
India would be getting benefit in various sectors through more than 20 joint ventures due to the efforts facilitated by Softbank by way of its various investments through the SoftBank Vision Fund (SVF) as stated by its director and vice president Mr. Rajeev Mishra in an exclusive interview to Economic Times.
List of 25 major investments made by SoftBank in Indian companies
SoftBank entered the Indian market in 2011 by investing $ 200 million in InMobi, a global mobile advertising platform and it hasn’t looked back ever since. After that it invested in many firms, some of which are as below:
- Ola: India’s leading cab (taxi) aggregator received $210 million in October 2014. After obtaining this investment Ola has exponentially registered growth and expanded to new countries and acquired two startups, TaxiForSure and Foodpanda, a food delivery platform. In an ongoing advancement, Ola has begun profiting on each ride and is going for productivity by 2019.
- Ola Electric: India’s first multimodal electric vehicle venture Ola Electric has raised a subsidizing of $250 million (Approx ₹1,725 crore) from SoftBank Group.
- Uber: This cab aggregator received investment from SoftBank in the amount of $1,200 million at the end of 2017. It’s a business rival of Ola, another cab aggregator backed by SoftBank with a solid clientele and customer base in emerging markets.
- Automation Anywhere: US and India-based Robotic Process Automation (RPA) startup Automation Anywhere has raised around ₹2,150 crore ($300 million) in an all-encompassing arrangement A subsidizing round driven by SoftBank Vision Fund.
- Paytm: It is one of the biggest digital payments platforms in India. This startup came under SoftBank’s radar much later in May 2017, when SoftBank finally got the opportunity to invest $1,400 million. Paytm has turned out to be one of the best bets for SoftBank in India. Paytm has been in the news recently for crossing 5 billion transactions in a year and Paytm is also venturing into forex services. In March 2019, the stage raised around $1.5 billion-2 billion from Softbank Vision Fund after which the Noida-based organization’s valuation flooded between $16-18 billion.
- Paytm Mall: India’s biggest advanced installments stage Paytm’s auxiliary Paytm Mall, has verified $445 million of every financing round by SoftBank.
- Delhivery: In March 2019, the coordination startup Delhivery brought $413 million up in a subsidizing round driven by Softbank Vision Fund. Later around the same time, Softbank put about $350 million in Delhivery, taking its valuation to $1.6 billion.
- Grofers: An Indian online grocery delivery service had raised $120 million from SoftBank in November 2015. Grofers was founded by Saurabh Kumar and Albinder Dhindsa in 2013 with its headquarters in Gurugram. Grofers continues to grow its user base and is operating in 13 cities across the country. The stage keeps on developing its client base and is working in 13 urban areas in the nation. In 2018, the online basic food item conveyance startup Grofers brought $61.6 million up in a series of subsidizing drives by Softbank. After which, Softbank held a 35-40 percent stake in the stage. While, in May 2019, Grofers packed away a $200 million arrangement F subsidizing round, which was driven by SoftBank Vision Fund. As of late in August this year, the basic food item conveyance administration space got another $70 million financing of its Series F round from SoftBank.
- Firstcry: SoftBank has mixed $395.7 million out of an arrangement E round of Pune-based online infant items omni-business retailer FirstCry.
- Policy Bazaar: An online protection startup Policy Bazaar which provides an online insurance comparison platform and a lending marketplace, brought in a $200 million financing led by SoftBank’s Vision Fund last June at an estimated valuation of $1 billion. The company’s platform offers more than 250 insurance plans across a variety of insurance companies. It started it’s business in 2008 a Delhi/NCR based startup, Policy Bazaar is supported by investors including Tiger Global and Temasek.
- Snapdeal: This online business commercial e-commerce marketplace was amongst one of the early high-value investments in India by SoftBank, receiving $650 million in total. Unlike its other successful investments, Snapdeal is struggling for additional fund-raise for its further growth and expansion. After a progression of dialogs, a year ago, Flipkart had pulled out of the arrangement to get Snapdeal.
- Oyo: This Indian hospitality startup got $100 million from SoftBank in August 2015. Oyo is now the largest hospitality company, an accommodation organization in India and it has also announced its entry in the UK, Indonesia, along with other European countries after entering China. In a recent development, Oyo is set to enter the wedding planning business, and it has also acquired AblePlus. Most recently gathered pledges by Oyo was around ₹1,600 crore ($250 million), driven by its current financial specialist SoftBank.
- Housing: Mumbai-based real estate searching platform Housing.com received $90 million from SoftBank in December 2014. Housing was founded by Rahul Yadav and his classmates from IIT-Bombay in 2012.
- Hike Messenger: Hike is India’s first social and technology innovative company providing messaging services for its users. It was founded by Kavin Bharti Mittal in 2012. SoftBank was one of the investors to invest in its first round of funding in April 2013.
- Flipkart: Investing in Snapdeal instead of Flipkart could be one of the few mistakes made by SoftBank in its early years in the Indian market but it was rectified as soon as SoftBank got the opportunity to invest in Flipkart in August 2017. SoftBank invested $1,400 million in Paytm which has doubled it’s previous investment i.e now $2,600 million. Walmart, a US retail giant was recently acquired by Flipkart for a colossal $16 billion which gives it an international flavour. It has applied for NBFC license looking to expand its business vertical and venture into digital lending.
- Inmobi: After SoftBank’s underlying interest in 2011, InMobi first got EBITDA gainful for the year finishing December 2016, as indicated by the organization’s official statement.
- Automation Anywhere: It is an Indian enterprise by Mihir Shukla. Automation Anywhere makes work more human by automating business processes and liberating people.
- Cohesity: SoftBank invested in this company after seeing its potential, it is led by Mohit Aron. Cohesity is fundamentally simplifying secondary data and applications.
- C2FO: It is an enterprise which works towards the idea of start-ups, it aims for a future where every company in the world has the capital they need to grow.
- Oak North: It is an UK based fintech institution for small and medium sized companies that provides business and property loans. This enterprise is led by Rishi Khosla, which leverages big data and machine learning to offer businesses customized lending solutions. Softbank has invested approximately $440 million.
- Fubgible: Fungible aims to revolutionize the performance, reliability and economics of data centers at all scales. It is an organization led by Pradeep Sindhu.
- Improbable: This enterprise is led by Herman Narula, it enables developers to create richer, more immersive and persistent virtual worlds.
- Petuum: Petuum aims to industrialize the Artificial Intelligence technology and also transforms enterprises across all industries through this. It is led by Hitesh Dholakia.
- Relay: Relay is a first of its kind organization which is dedicated towards drug discovery pipeline centered on protein motion. This organization is led by Sanjiv Patel.
- Roivant Sciences: Roivant Sciences is an enterprise which is dedicated towards developing innovative medicines through a novel form of industrial organization in Research & Development. This company is run by Vivek Ramaswamy.
Softbank has been helping a number of firms to tap the international markets. Among its India portfolio companies, Oyo has expanded to China, Europe and US. Paytm has entered Japan and Canada while FirstCry, the baby products retailer, has entered the UAE.
SoftBank has already invested $10 billion across Indian startups such as Paytm, Oyo, Delhivery, FirstCry, among others, out of which $8 billion came from the Vision Fund. In a statement to ET in February 2019 the fund, which is widely seen as reordering tech investing, will start to cut smaller sized cheques in the range of $100 million in companies which are valued at around $500 million. ET reported that eyewear retailer Lens kart is in talks with SVF to secure $350 million in fresh funding, which is likely to value the Delhi-based firm at $1.3 billion.
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