SoftBank’s Indian Portfolio Yields $5.5 Bn In Exits Since 2018

Japanese conglomerate SoftBank has made more than $5.5 Bn in exits from its India portfolio since it began operations in November 2018 in Mumbai, said Sumer Juneja, the firm’s managing partner and head for Europe, the Middle East and Africa.

In a recent interview with Mint, he stated that the late stage investor has realised $1.5 Bn from exits in the past 12 to 18 months. Additionally, he mentioned that another $1.5 Bn is liquid and held in tradable equities.

According to Juneja, SoftBank is expected to have one to two annual exits in India. Recently, the Japanese investment major has made partial exits from unicorns such as Lenskart and FirstCry and booked profits from listed startups Paytm, Zomato, Delhivery and Policybazaar. In fact, in its Q1 FY24, the four startups contributed gains of $400 Mn to SoftBank Vision Fund 1.

However, the investment firm’s biggest exit remains from Flipkart in 2018, where it sold its 20% stake in the ecommerce giant to Walmart for around $4 Bn. SoftBank rejoined Flipkart’s captable in 2021, as part of a $3.6 Bn funding round.

Overall, the Japanese investment giant has invested around $15 Bn in India since 2011. It has put in around $11 Bn through its vision funds since 2017. “Our thesis in India is that we will invest in companies at $1 Bn – $2 Bn valuation and exit at the $5 Bn – $6 Bn valuation mark,” Juneja said.

SoftBank will see more exits in the near future, with its portfolio companies such as FirstCry, Lenskart, OfBusiness, Swiggy, Icertis, and Ola Electric likely to go public. However, Juneja noted that predicting the timing of these public offerings is challenging due to market volatility and the upcoming 2024 general elections.

SoftBank’s Shifting Stance

The Japanese investment major turned into a ‘defensive mode’ in May 2022, after markets collapsed in the aftermath of Russia’s invasion of Ukraine. More than a year later, Vision Fund I and II clocked a $1 Bn investment gain after six straight quarters of losses. 

Being one of the most active unicorn backers with 22 Indian unicorns in its portfolio, SoftBank has slowed down its Indian investments over the years. In 2021, the VC invested over $3 Bn across 17 deals. In stark contrast, it participated in just four rounds in 2022.

In July, SoftBank founder Masayoshi Son told investors that it was moving to the offensive and was keen to lead the AI revolution.

“Masayoshi Son has been talking about AI since 2017. However, the use of AI has become more sophisticated. If it is not a very high-tech team and product team that can use AI, then we will not invest in them,” said Juneja.

He added that the firm spends an inordinate amount of time on companies to assess if they have the right tech team, product team and DNA to build an AI-first business.