With $8 Bn investment, SoftBank outruns all investors and its commitment in India

Till the beginning of 2015, startup investment in India was largely championed by Lee Fixel-led hedge fund Tiger Global. However, after leading $650 million round in Snapdeal, SoftBank dwarfed and outrun all global VCs and large strategic investors by a thumping margin.

A year later in 2015, the Masayoshi Son-led investment conglomerate had participated in over $1.6 billion worth investment rounds in companies including Ola, Snapdeal, Grofers, and Oyo.

Son, who had committed to invest about $10 billion in 2015 over the next 10 years, seems in rush to surpass the committed investment figure as his firm sees many enticing opportunities.

According to a data by startup research and data analytics firm Tracxn, SoftBank Group along with a standalone $100 billion staggering SoftBank Vision Fund has parked over $8 billion in past three years.

While the Japanese group had slowed down its investment activities in 2016, it had placed mega bets worth $4.2 billion in 2017. Last year, it had pumped-in $4 billion in two entities - Flipkart and Paytm. Importantly, it had provided much-needed liquidity to investors such as Tiger Global in Flipkart and Ola.

Accel Partners, an early backer of Flipkart, Iconiq Capital and DST also exited partially from the Bengaluru-based online marketplace. Meanwhile, SAIF Partners and Saama Capital partially exited from Paytm when SoftBank picked up 20 per cent stake in the Noida-based payment firm.

Besides, SoftBank, Tiger Global, and South African media conglomerate Naspers are second and third largest investors in the Indian startup ecosystem. While Tracxn estimates Tiger total investment of approx $3.63 billion, Naspers had deployed about $2.9 billion.

So far, SoftBank had backed 16 companies in India. Though the current portfolio of SoftBank in India appears powerful, it also had suffered body blow with its investment in Snapdeal, InMobi, and online real-estate portal Housing.com. Last month, it participated in $445 million round in Paytm Mall with Alibaba.

Meanwhile, Alibaba is also placing long-term strategic bets in fledgling Internet commerce market. Alibaba along its payment affiliate Alipay had invested about $425 million in e-grocer Bigbasket and foodtech major Zomato.

The Jack Ma-led Chinese group is gearing up to deploy about $8 billion over the next four years. It would eye investment in areas including, payment, enterprise, and entertainment (OTT) among others. The Chinese e-commerce juggernaut is also slated to spend about $2 billion to invest in e-commerce, logistics, and buy Paytm’s e-commerce arm.

While SoftBank, Alibaba, Tencent and a few others are undoubtedly helping large technology companies to scale fast and outrun the competition, the flip side is that these investments are flowing towards only a handful of companies. We certainly need more such investors who can cut large cheques for growth and mid-stage startups.

The SoftBank investment figure in India was first reported by BusinessLine via Tracxn.