Softbank Plans to Invest Over $1 Billion in the First Quarter to Support the Startup Boom


Softbank Plans to Invest Over $1 Billion in the First Quarter to Support the Startup Boom

SoftBank, one of the most influential tech investors is set to invest close to $1.2 billion in Indian startups in the first quarter of the current financial year. This is in line with SoftBank's global approach where it made several big-ticket investments in tech startups last week.

It is finalizing a $200-250 million investment in ride-hailing company Ola's electric subsidiary, Ola Electric, and will spend at least $250 million in neo-banking startup Zeta, making it a unicorn, a term for companies valued at $1 billion or more.

SoftBank is investing $400-$500 million in online food delivery startup Swiggy, which already has top-tier local startups including logistics firm Delhivery, payments platform Paytm, and financial services major Policybazaar in its portfolio.

It has now invested $250 million in Meesho, turning it into a unicorn and tripling its valuation to just over $2 billion.

Cumulatively, these investments from SoftBank are more than $1 billion in size.

“SoftBank has become quite aggressive given the current scenario. These investments (mentioned above) will close in the current quarter itself and some more could be there later in the year,” a person aware of the plans said.

SoftBank's haste in making new bets comes at a time when Tiger Global, a New York-based hedge fund that is another ardent supporter of Indian startups, is fueling the country's tech funding boom by minting new unicorns.

It has invested more than $590 million in 11 local startups so far, with some more deals planned in the coming weeks.

SoftBank CEO  Masayoshi Son, who believes in backing market leaders, recently said SoftBank is like a ‘goose’ giving ‘golden eggs’ referring to a strong pipeline of his portfolio companies planning to go public.

He expects 10-20 startups from his portfolio to launch initial public offers in one year. In India, its portfolio firms like Delhivery and Policybazaar are actively working towards going public. There would be more going public through 2022-2023.

SoftBank has now invested $8 billion in India's digital economy through its Vision Fund 1 and 2, including $2.5 billion in Flipkart, which it later sold for $4 billion to Walmart when the latter acquired it in 2018. In total, SoftBank Group has invested more than $11 billion in India.

It has previously backed Paytm, hospitality startup Oyo, eyewear retailer Lenskart, and baby goods e-commerce firm FirstCry, among others, and has played an important role in India's startup ecosystem.

Unacademy, an edtech company, and MindTickle, a SaaS startup that it funded last year, are among its latest bets.