SUMMARY
It is targeting B2C, enterprise, and media startups in India
SoftBank may also seek opportunities to invest in the businesses where existing investors are eyeing exit through a secondary sale
Last year it invested about $500 Mn, majorly in the SaaS startups
Japanese investor SoftBank is in talks with about four to five Indian startups to invest, support and eventually help them grow into unicorns. Reportedly, the Masayoshi Son-led firm is planning to invest between $50 Mn to $100 Mn in each of the startups in its radar.
The VC behemoth is primarily focussing on startups operating in the B2C, enterprise, and media segments, reported Business Standard. Further, according to the report, these startups are within a valuation range of $400 Mn and $500 Mn.
SoftBank may also seek opportunities to invest in the businesses where existing investors are eyeing exit through a secondary sale; where such startups are deferring IPO.
Last year, SoftBank had invested about $500 Mn in Indian SaaS startups, much lower than the $3.2 Bn investment it made in 2021 across segments. As of now, SoftBank’s total investment in Indian startups stands at $15 Bn, where it already withdrew $7 Bn.
Market wise, India is the third largest market for SoftBank after the US and China in terms of making investment deals.
At the end of FY23, the investor gained over $100 Mn from four significant listed Indian startups including Zomato, Paytm, Delhivery, and PB Fintech.
As far as Indian startup investments are concerned, the Japanese fund has taken a back seat. After participating in 6 deals each in 2019 and 2020, the fund participated in over 17 deals in 2021. However, since 2022 beginning, the fund has merely participated in three startup funding deals and its 2023 count stands at zero.
Recently, the investor was reported to have been planning to launch a private credit strategy to invest into late-stage startups in a debt or debt-like structure. Though the plan is still in infancy, launching credit funds will certainly help SoftBank finance the late stage tech startups which are pushing back their IPO plans due to the macroeconomic situation but need fresh capital to survive longer.
Even through the funding winter, the Indian tech startups have managed to raise about $3 Bn during the first quarter of 2023. However, 84% of Indian VCs expressed high difficulty in raising growth-stage capital.
According to Inc42’s Indian Tech Startup Funding Report Q1 2023 report, a 77% Y-o-Y decline was noticed in the number of mega deals. While 21 startups gained unicorn status in 2022, this year, no unicorns have been minted till now.
