SoftBank In Talks To Invest In Indian Start-ups, Aims To Foster Unicorn Growth

Softbank, a Japanese investment firm, is in talks to invest in five Indian start-ups with valuations ranging from $400 to $500 million, according to Business Standard, citing persons familiar with the situation.

According to the report, the Japanese tech investor Masayoshi Son intends to support these organisations in their next stage of growth and eventually help them become unicorns.

Based on the research findings, investment categories encompass B2C, enterprise, and media sectors. SoftBank plans to allocate investments ranging from $50 to $100 million to each of these start-ups.

It's worth noting that this investment amount is considerably lower compared to SoftBank's previous rounds of funding in Indian start-ups.

SoftBank is actively exploring opportunities in companies where existing investors are seeking an exit through a secondary sale, primarily due to the postponement of their IPO plans. The source reveals that SoftBank is contemplating an investment exceeding $100 million in one such company.

In 2022, SoftBank Group Corp. would invest around $500 million in Indian enterprises, primarily in software as a service (SaaS) organisations. This was far less than the $3.2 billion it intended to invest in India by 2021. According to the source, SoftBank's total investment in Indian firms is estimated to be over $15 billion by March 2023. Furthermore, the business has withdrawn a $7 billion investment.

SoftBank, the world's largest technology investor, is encountering a number of obstacles with its investments in India. A handful of high-growth startups in which SoftBank has invested, such as Oyo and Meesho, have dramatically reduced their capital burn. This could have an influence on their earlier impressive growth.

Furthermore, many companies that have reached the end of their growth cycle have decided not to raise new financing at lower or similar valuations, according to the report. These businesses also want to wait six months. As a result, SoftBank has few choices for injecting additional capital into these enterprises.

Despite these obstacles, India remains SoftBank's third-largest market after the United States and China. The company's top executives visited the country in March of this year.