Japanese investment firm Softbank is in talks with five Indian start-ups, with valuations ranging from $400 to $500 million, to invest, reported Business Standard, citing sources aware of the development. The report said that Masayoshi Son-led Japanese tech investor plans to support these firms in their next stage of growth and eventually help them become unicorns.
According to the report, the areas of investment include the B2C space, enterprise, and media. It plans to infuse $ 50-100 million into each of these start-ups. The amount is much lower than its earlier rounds of investment in Indian start-ups.
The report also mentioned that SoftBank is seeking opportunities in firms where existing investors want to exit through a secondary sale because the companies have postponed their IPO plans. It is considering putting more than $100 million in such a firm, the report said.
In 2022, SoftBank Group Corp. invested around $500 million in Indian companies, mostly in software as a service (SaaS) firms. This was significantly lower than the $3.2 billion it invested in India in 2021. As of March 2023, SoftBank’s total investment in Indian companies is estimated to be around $15 billion, according to the report. The company has also withdrawn an investment of up to $7 billion.
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SoftBank, the world’s largest technology investor, is facing a number of challenges in its investments in India. A number of high-growth companies in which SoftBank has invested, such as Oyo and Meesho, have been significantly cutting their cash burn. This could impact their earlier robust growth.
In addition, many companies that have reached the final stage of growth have decided not to raise fresh funds at lower or similar valuations, the report noted. These companies also want to wait for six months. As a result, SoftBank does not have many options to infuse new rounds in these companies.
Despite these challenges, India continues to be SoftBank’s third-largest market after the US and China. The top management of the company visited the country in March this year.