Late-stage technology investor SoftBank Investment Advisers has announced that it has made more than $5.5 billion in exits from its Indian portfolio since the firm began operations in Mumbai in November 2018. Sumer Juneja, the managing partner of SoftBank Investment Advisers, revealed that $1.5 billion of the total was booked in the last 12-18 months, with another $1.5 billion in liquid and tradable equities.
Juneja explained that as SoftBank’s portfolio matures, exits will naturally occur. The firm aims to have at least one exit per year, if not two. He also highlighted that most of the investments made by SoftBank in India have resulted in up-rounds, attracting new investors at higher valuations.
In recent months, SoftBank has made partial exits in private startups such as Lenskart and FirstCry, as well as booking profits from listed startups like Paytm, Zomato, Delhivery, and PolicyBazaar. However, SoftBank still holds stakes in these companies.
SoftBank’s largest exit to date was its 2018 sale of a 20% stake in e-commerce marketplace Flipkart to Walmart for around $4 billion. In 2021, SoftBank reinvested in Flipkart as part of a larger $3 billion funding round.
Since 2011, SoftBank has invested approximately $15 billion in India, with around $11 billion coming from its vision funds since 2017. Juneja stated that SoftBank’s investment thesis in India is to invest in companies with valuations of $1-2 billion and exit at valuations of $5-6 billion.
Looking ahead, SoftBank is likely to make more exits in India as additional companies from its portfolio go public. Juneja mentioned potential candidates for public listings, including FirstCry, Lenskart, OfBusiness, Swiggy, Icertis, and Ola Electric. However, the timing of these public offerings is uncertain due to volatile markets and the upcoming general elections in 2024.
SoftBank Investment, which has not made any new investments in India in the last 15-16 months, has been focusing on building a robust pipeline of AI-first and tech-first companies. Juneja explained that the recent lack of investments is due to well-capitalized companies not requiring immediate funding for the next few years. Additionally, SoftBank has decided not to invest in some companies due to issues with product market fit, unit economics, or the quality of the technology or management teams.
Juneja acknowledged that early-stage venture firms, which feed into late-stage investors like SoftBank, have been focused on portfolio management in the past year, resulting in a lag in the investment pipeline. However, he expects this to change as SoftBank actively seeks out tech-first and AI-first companies in the Indian market.
AI has been a key focus for SoftBank since 2017, with Juneja stating that the use of AI has become more sophisticated and accessible. The firm emphasizes the importance of evaluating whether companies have the right tech and product teams with the ability to build an AI-first business. Juneja believes that the use of AI will rapidly increase in the future, noting that all of SoftBank’s portfolio companies have incorporated some element of AI in their processes.
Overall, SoftBank’s exits from its Indian portfolio reflect the success of its investments and its ability to generate significant returns. As the company continues its investment strategy in India, it will likely make more exits and seek out promising AI-first and tech-first companies in the market.
