SoftBank fund has $13 bn unspent capital, looks to invest part of it in India: Report

While there has been talk of all doom and gloom following the coronavirus pandemic and the lockdown, Japanese investor SoftBank with its Vision Fund or (SVF) says it has a war-chest of $13 billion, which it is keen to invest in Indian startups, reports Economic Times.

This information has come directly from Rajeev Misra, the CEO of SVF. He claims there is this amount of capital lying unspent at their end and they are seeing the potential in Indian companies which are technology oriented. According to its assessment, the world will move more towards technology, post COVID-19 and some of the Indian startups may have an edge there.  

According to the SVF CEO, they are in discussions with some 15-20 companies and they will come with the deal announcements in the near future.

SVF is looking at making secondary stage investments by buying off the shares from some of the early stage investors in these companies. Many of these investors come in with definite time-bound investments and the cycles may be ending soon. They will generally pull out irrespective of how much their investments have appreciated.

Form SoftBank’s perspective, the bank has floated SVF 1 and SVF 2. Just when it was expected that the SVF 2 fund will be able to attract a lot of investments, there were reverses due to the WeWork IPO failure resulting in SoftBank incurring a huge loss.

SoftBank has had to invest its own $5 billion in the fund, but Misra claims funds are not an issue. He has named a few promising companies in the portfolio.

Bytedance, Ele.me and Doordash, Coupang in Korea and in the Indian context, Policybazaar, Delhivery and Grofers. The SVF CEO says they had invested $81 billion out of SVF 1 and returned $10.7 billion to investors over the last three years. SVF 1 had attracted investments from Saudi Arabia and Abu Dhabi, which are sovereign funds.

Rajeev Misra also discussed the situation with another major investment in its portfolio, Paytm. The company may not be in need of any fresh investments currently but has a challenging time ahead with the association of Facebook and Reliance Jio. The investment by Facebook in Reliance Jio means they will try and push WhatsApp Pay aggressively. The Jio Mart will also offer competition to Paytm Mall. SoftBank sees a lot of consolidation taking place in the Indian startup scene particularly in segments where there is a crowd of players.

Misra has pointed out verticals like epharmacy, office sharing, grocery delivery, e-fitness and education as such segments which may witness consolidation in the coming days. The stronger ones may survive. SoftBank will definitely keep a close watch on Paytm and other startups in India.