SoftBank plans to wait for right opportunity to list its invested companies

SoftBank, a Tokyo based telecom company which is one of the biggest investors in Indian tech-enabled startups, said it is not in a hurry to list the companies it has invested in the country in the Indian portfolio and plans to wait for the right opportunity.

As stated by Munish Verma, managing partner at Softbank Vision Fund, in an interview, Softbank has had a number of companies that have gone public including Uber, Guardant and Slack in the past years. And in future there will be more companies going public. The same plan will be followed as the company grows in India too. He added that there are no recent plans for the same.

Munish Verma, CEO of SoftBank, clarifies that IPO’s (Initial Public Offerings) are an important one-time decision for the company, so they plan to take them public when the time is right.

Masayoshi Son has strong opinions about the future of SoftBank and has put forth a conception of a 300-year plan for the company, with the end goal being to build the most valuable firm in the world. In India itself the company plans to invest $2-4 billion.

Having observed that is easier to capture and store data with increased computational ability, the company’s strategy is to “find where we can get companies that can use this data efficiently to solve the problematic points—those could be for consumers or for businesses”, Varma said.

Harish HV, the managing partner at ECube, an ESG (environment, social and governance) platform which was launched by former Tata executives in January this year, said “A lot of investors like private spaces as it keeps the reporting scrutiny away,” further stating that there is no compulsion for firms to go public.

Sumer Juneja, partner and head of India at SoftBank Investment Advisers, points out that SoftBank Vision Fund is quite sector agnostic. He further states that each company represents particular problem areas, using technology to address them in a smart way. Therefore, there is no top-down allocation on countries, regions or sectors. It is all bottoms up”, he added.

The mega fund is already shifting its focus on various fintech companies of the industry and has invested in companies like Greensill, Kabbage, Paytm, Policy bazaar and ZhongAn Insurance. It invests in big startups who have interest in everything from robotics to satellites, artificial intelligence to computerized enhancement for human bodies. SoftBank’s stake in Alibaba alone is now worth nearly $132 billion, or 40 percent more than SoftBank’s market cap.

Varma states that being a Softbank portfolio company gives the other companies the access to SoftBank’s ecosystem. He further adds that when they started with the ecosystem, it was all just talk and now they have 81-83 companies in the Vision Fund and all these are excellent leaders in their own field.

On the opposite side of the coin, even though Softbank’s capital brings in great advantages for a startup. It still has a lot many conditions of its own. Moreover, over the past few months, SoftBank has moved to drastically shrink itself. This has caused a lot of friction between investors and promoters. One of the examples of such a situation is Ola.

Juneja, however, insists on working as a team for the collective betterment of the company. Keeping in mind the idea of building a scalable and growing business, everyone in the company should work constructively towards achieving it. He says, “The board’s role is to be supportive and helpful. All businesses will go through ups and downs—the board needs to support the entrepreneur and give him space to operate.”

Also, Softbank is looking forward for deals in the country. For instance – the company is planning to invest $300-500 million in the food delivery start up Swiggy. Prior to this, Softbank has never invested in a food tech business in India. While the talks about the deal have existed long since the last quarter of 2018, the details about deal have come out recently.

Softbank is also on the verge of finalising a massive Rs 9,600 crore capital infusion deal with Piramal Enterprises and one more party. The company is interested in Piramal Group because Ajay Piramal, as well as his in-law Mukesh Ambani, have been discussing a new business together in which Softbank sees strong potential and growth opportunities.


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