Since initiating operations in Mumbai in November 2018, Japanese conglomerate SoftBank has garnered exits worth more than $5.5 billion from its India portfolio, according to Sumer Juneja, the firm’s Managing Partner and Head for Europe, the Middle East, and Africa.
Recent Exit Triumphs and Tradable Assets
Juneja revealed in an interview that the late-stage investor has realized exit gains exceeding $1.5 billion in the past 12 to 18 months. Additionally, SoftBank holds around $1.5 billion in tradable equities.
Anticipated Annual Exits and Notable Partial Exits
SoftBank envisions achieving one to two annual exits in the Indian market. The company has recently executed partial exits from unicorns like Lenskart and FirstCry. It has also harvested profits from publicly listed startups such as Paytm, Zomato, Delhivery, and Policybazaar. Notably, these four startups contributed $400 million in gains to SoftBank Vision Fund 1 in the first quarter of FY24.
Key Previous Exit: Flipkart
Among SoftBank’s significant exits, the most notable occurred in 2018 when it sold its 20% stake in Flipkart to Walmart for approximately $4 billion. The company re-entered Flipkart’s circle in 2021 through a $3.6 billion funding round.
Investment Strategy and Valuation Goals
Cumulatively, SoftBank’s investments in India since 2011 amount to roughly $15 billion, with nearly $11 billion poured in through its Vision Funds since 2017. Juneja explained that SoftBank’s investment approach in India centers around investing in companies valued at $1 billion to $2 billion and exiting when valuations reach $5 billion to $6 billion.
Upcoming Exits and Challenges
SoftBank’s portfolio companies like FirstCry, Lenskart, OfBusiness, Swiggy, Icertis, and Ola Electric are poised to go public, leading to further exits. However, the precise timing of these public offerings remains intricate due to market volatility and the upcoming 2024 general elections.
Shift in Strategy
After adopting a “defensive mode” in May 2022 due to market uncertainties, SoftBank transitioned back to an offensive stance in July 2023. The company aims to spearhead the AI revolution, focusing on investments in high-tech and AI-driven enterprises.
Selective AI-Focused Criteria
Juneja emphasized that SoftBank meticulously assesses potential investments, ensuring they possess the necessary technology and product teams to build AI-first businesses. This approach underscores the rising significance of AI in the firm’s investment strategy.
