Japanese investment giant SoftBank is looking to partially exit from three startups which are aiming at an IPO next year — Ola Electric, Swiggy and First Cry.
But its decision will depend on the size of the offer for sale pool in each of the companies. According to a BS report citing sources aware of the strategy, Softbank invested over $850 million collectively in these companies whose value conservatively would go up more than 4.3 times to around $3.7 billion, based on preliminary estimates of their projected valuation when they go public next year.
In August 2023, Sumer Juneja, the firm’s managing partner and head for Europe, the Middle East and Africa, said Japanese conglomerate SoftBank has made more than $5.5 billion in exits from its India portfolio since it began operations in November 2018 in Mumbai.
“The India portfolio has actually been doing relatively very well. Swiggy, FirstCry, Ola Electric have all been marked up in this most recent quarter. Ola Electric raised from Temasek at a $5.4 billion valuation. For Swiggy, you can look where Zomato is trading at as both the companies are neck to neck,” SoftBank Vision Fund chief financial officer Navneet Govil told Moneycontrol after the company’s Q2 results.
As per the report, for the quarter, SoftBank Vision Fund had a $300 million gain across its two funds that have cumulatively bet around $142 billion on 475 tech companies across the world. In Vision Fund 1, there was a gain of $2.5 billion and in Vision Fund 2 there was a loss of $2.1 billion in Q2, while the conglomerate’s LatAm funds were mostly flat.
In its earnings presentation, the investor highlighted 6 companies from its India portfolio — OYO, Swiggy, Ola Electric, OfBusiness, Lenskart, and FirstCry — among the top 15 of its private holdings worldwide that are cumulatively tracking $12 billion in gains at present.
Moreover, at least 4 of these 6 Indian companies are expected to debut in the public markets in the next one year.
Earlier, the Japanese investment major has made partial exits from unicorns such as Lenskart and FirstCry. SoftBank’s biggest exit was from Flipkart in 2018, where it sold its 20% stake in the ecommerce giant to Walmart for around $4 billion.
In a recent public appearance, SoftBank founder Masayoshi Son reportedly said he believes artificial general intelligence (AGI) — artificial intelligence that surpasses human intelligence in almost all areas — will be realised within 10 years.
Focusing on the AI possibilities, Govil quoted in the moneycontrol report as saying, “We took our Indian portfolio companies like Policybazaar, Lenskart, Meesho, Mindtickle, etc to Silicon Valley to meet the top AI companies such as Anthropic, OpenAI, Cohere, Databricks… I was in those meetings and the range of AI applications that could be done are just immense.”
Moreover, SoftBank’s Son is reported to be drawing up the blueprint of a hardware AI startup with OpenAI chief Sam Altman and famed iPhone designer Jony Ive.
