Japan’s SoftBank Group is increasing its focus on the Indian market and it could invest as much as $10 billion in Indian startups in 2022 through its Vision Fund, having already invested $3 billion in the ongoing calendar year.
However, Rajeev Misra, chief executive officer of SoftBank Investment Advisers, said the company will explore such opportunities at the right valuations. “If we find the right companies, we could invest $5 billion to $10 billion in 2022,” he said at a recent event organised by Bloomberg.
The $100-billion fund by Softbank tweaked its strategy for the Indian market last year to explore smaller and early-stage investments. The fund previously made big-ticket investments in consumer internet firms like Oyo Hotels & Homes, Delhivery, Grofers, Ola, Paytm and PolicyBazaar.
SoftBank also re-entered Flipkart by participating in its $3.6 billion funding round in August this year.
Paytm and Oyo are readying their initial public offerings (IPOs), and are poised to raise $2.5 billion and $1.1 billion, respectively. “There’s a lot of pent-up demand for tech IPOs … it is India’s time,” Misra said.
The country’s tech ecosystem is taking off and SoftBank’s patience will be “rewarded”, he said, adding that there’s been an “amazing turnaround” in India, where once it was difficult to justify investments.
In the startup space, SoftBank has identified fintech as one of the major focus areas. Misra said that innovation in the financial inclusion space is key to India’s goal of becoming a $5 trillion economy.
The fund is also focusing on sectors such as enterprise, health tech and software-as-a-service (SaaS).
The Indian startup space has attracted a slew of global investors lately, with SoftBank, Tiger Global, Falcon Edge Capital and Sequoia Capital India aggressively making investments this year.
While India remains a key strategic market, the Vision Fund posted a loss of $7.3 billion for the quarter ending in September, largely due to the loss in value of publicly traded firms such as South Korean ecommerce firm Coupang and Chinese cab-hailing firm Didi.
The Vision Fund unit accounted for 44% of SoftBank Group’s net asset value at the end of September quarter compared with 16% in the same period a year ago.
SoftBank’s CEO Masayoshi Son said then that he was “not proud” of the performance of the Vision Fund unit during the quarter.
SoftBank, said Misra, has slowed its pace of investment in China but will continue with its investments in the market, which has become the “major center” of artificial intelligence in the world.
Misra also recently made an investment in Kavin Mittal-led social platform Hike, albeit in a personal capacity.