SoftBank's new India strategy: 2nd Gen Entrepreneurs only, Smaller deals

Jyotshana Rani

26th Feb'21

About SoftBank

SoftBank is a Japanese multinational conglomerate holding company headquartered in Tokyo. It owns stakes in many technology, energy, and financial companies. The Vision Fund run by SoftBank is the world's largest technology-focused venture capital fund, with over $100 billion in capital.

It operates in various areas including broadband, fixed-line telecommunications, e-commerce, internet, technology services, finance, media and marketing, semiconductor design, etc. In the Forbes Global 2000 list, SoftBank was ranked as the 36th largest public company in the world, and the second-largest publicly traded company in Japan after Toyota. Read more.

 

Must-read: How to Choose the Right Private Equity Fund for Your Business in 2021

 

Source: The Economic Times

 

SoftBank's new India strategy

SoftBank has been finding it hard to raise investment for its second Vision Fund after facing a setback from its two most coveted investments in recent times – Uber and WeWork. SoftBank Vision Fund 1 period ended in September reporting a loss of $6.4 billion, while the inaugural Vision Fund reported an operating loss of $9 billion for the quarter ended Sept 30.

WeWork, which was the huge bet of SoftBank, attributed a large amount of loss. And it reduced its valuation to $10 billion from $47 billion, and Uber, which is now trading much below its price post IPO.

In the past year, SoftBank has also tweaked its existing strategy for India. In its new strategy, the investment firm now looks to invest relatively smaller amounts of $100-200 million, which was not the case earlier. Earlier, SoftBank was known for investing in hefty rounds with hefty amounts.

This restrained approach of SoftBank shows how the investment juggernaut which is famous for aggressive deal-making, is changing strategy by preparing for a smaller and more disciplined version of Vision Fund. The move could have a huge impact on the Indian startup ecosystem, as SoftBank is an investor in half of 24 homegrown unicorns.

Source: Mint

 

At SoftBank World 2017, an annual conference, in July, SoftBank CEO Masayoshi Son said that SoftBank is aiming not just at one technology, one business model, one brand to drive the world. Rather, they want to form a group of like-minded people, comrades, entrepreneurs to work together to create a revolution.

Recommended: Top 3 Marketing Investment for 2021

 

SoftBank Vision Fund 2: Journey, Investment Strategy And What’s Coming

Last year, the first Vision Fund reported an $18 billion loss, but It recorded an investment gain of $2.8 billion last quarter after publicly traded stocks, Slack and Uber recovered from pandemic-related lows. After losing billions in the first Vision Fund, Japanese tech giant SoftBank announced the $108 billion Vision Fund 2 last July. Read more.

 

We, at OpenGrowth, are continually looking for trending startups in the ecosystem. If you want to know any further information about the startup ecosystem or have any mind-boggling ideas, do refer to our other blogs. 

Jyotsana is very keen to express her views on new topics and wants readers to remember her through her writing. She is passionate about reading and believes that words wield the power of changing the scenario and she uses them to encourage people to the best of her knowledge.

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