Japanese conglomerate SoftBank Group Corp is looking into investing somewhere between $5 billion to $10 billion in India next year, provided it finds the right opportunities at the right valuation, CEO of Softbank Investment Advisers Rajeev Misra said.
“We could invest another $5-10 billion in 2022, if we find the right companies at the right valuation. The quantum of capital we are able to invest today is not as high because the founders are not raising as much money. They’re raising $150-300 million. To invest $3-4 billion, we would have to invest in about 15 companies,” he said speaking at the Bloomberg India Economic Forum 2021. He explained that ticket sizes have come down dramatically and that it has to expand its portfolio base to reach its investment targets.
Misra said the company is expanding its presence in India although it doesn’t have a pre-defined budget for the country.
He added that India has done an ‘amazing turnaround’ over the years to become a preferred destination for global investors from being a market where it was difficult to justify investments. The Paytm- and Oyo-backer has invested $3 billion across 24 companies in India this year.
Talking about the sectors of interest, Misra said SoftBank has invested in a range of sectors — right from edtech to fintech and software-as-a-service (SaaS) companies.
“I think fintech is the biggest opportunity in India because India is unbanked. We had invested in Paytm and Policybazaar, we’re looking at two other fintech companies, because financial inclusion is a must in India. The big ones that we like are still B2B businesses that serve businesses to improve their HR and sales quality. These are not just for India but can go global,” he noted.
On being asked about investment plans in China in the backdrop of the tech crackdown in the country, Misra said China is a market where SoftBank stays in.
“China has many different aspects where most of the noise that’s coming and most of the regulations that are coming are on B2C businesses where the business is touching the consumer, where there are data issues.”
“We believe that China is one of the major centres for AI innovation in the world. On the long run, there are many exciting opportunities,” he added.
Talking about the startup IPO frenzy, Misra said the pent-up demand is fueling tech IPOs and this frenzy would slow down as demand for such issues cools down.
Many of the Indian start-ups that SoftBank has invested in are en route to their IPOs, including PolicyBazaar, Delhivery and Oyo. Companies like Ola are also reportedly looking at approaching the market regulator Sebi for listing in the coming months.