Rajeev Misra, CEO of SoftBank Vision Fund (SVF) said that the fund considered possible investment in Jio Platforms and Reliance Retail but decided against investing since its expectations were higher than what these Mukesh Ambani’s firms would deliver.
His comments come at a time when Ambani’s technology and retail ventures managed to raise billions of dollars from various sovereign wealth funds and tech majors like Google, Facebook, Qualcomm and Intel.
Jio Platforms raised Rs 1,52,056 crore ($20.55 billion) from 13 global investors for a cumulative equity stake of 32.96%. Reliance Retail, on the other hand, raised Rs 47265 crore ($6.49 billion) from nine investors for an equity stake of 10.52%.
When asked, Misra regretted not having the Reliance companies in SVF portfolio, he said, “How can I regret when we decided not to participate?.”
“There is capital and there is capital – with help. Vision Fund is different. Very different from all others. We are not just capital. Between Fund I & II, we have 105 companies now. And the group, as telecom company in Japan, as Alibaba, companies in China, T-Mobile, if you look at our ecosystem we help these companies get business across the world,” he told Business Today
The $100-billion fund has now changed its strategy for the Indian market, and will make smaller and early-stage investments, the executive told Indian media.
The fund previously made big-ticket investments in consumer internet firms like Oyo, Delhivery, Grofers, Ola, Paytm and PolicyBazaar in the country. Its total India investments stand at around $11 billion.
Mishra said that the fund is now focusing on sectors such as enterprise, health tech and Software-as-a-Service (SaaS).
“We are going early as we want to grow with the company and not be averse to a $30-$50 million funding round…In Vision Fund I, we would not do anything less than $100 million, but not anymore..,” Misra was quoted as saying by the Economic Times in a separate interview.
In September, Softbank Vision Fund participated in a $150 million financing round in edtech firm Unacademy. It is reportedly considering investing in SaaS startup MindTickle, which is preparing for an $80-$100 million funding round.
The executive said that the fund is currently helping Indian portfolio companies like Lenskart and FirstCry expand globally. “We help them with strategy, higher staff. It’s not just capital. We become the biggest shareholder and we help them with expansion. That is what differentiates us. We are more than capital.”
Misra said that SoftBank is currently sitting on over $50 billion of cash, which will increase to $80-90 billion. He added that the fund wants to “catch companies young and be able to get a skin in the game when they scale up.”
The fund reported $18 billion in profit in the first half of the current fiscal compared to $17.7 billion loss in FY20 ended March.
“…we will diversify some of our public stock like in Alibaba which is close to $180 billion, slowly from China exposure to global exposure…we have a lot of firepower. The objective is to invest in AI-driven companies that are disrupting the existing economy and companies over the next 3-4 years,” he was quoted as saying.