SoftBank in talks with 5 Indian startups, may infuse up to $100 million in each

India is still SoftBank’s third largest market after the US and China and the top management of the company visited India in March this year

Japanese tech investor SoftBank has opened talks with about five Indian startups, with valuations between $400 and $500 million, to pump in money and back them in their next stage of growth and help them become unicorns, which are privately held companies valued at $1 billion or more.

The Tokyo-based investment bank is looking to invest in business-to-consumer (B2C) enterprises and media sectors. It plans to infuse $ 50-100 million in each of these companies, which is much lower than its earlier rounds in Indian startups, Business Standard reported, citing unnamed sources.

The report comes at a time when startups are facing the so-called funding winter as investors tighten purse strings over global uncertainties and growing fear of a recession in the West.

SoftBank is also exploring options to invest in companies where existing investors want to offload stakes via secondary sale because the planned initial public offerings (IPOs) have been benched. If such opportunities are available, SoftBank can also consider putting in more than $ 100 million, the report said.

In 2022, SoftBank’s India investments were largely focused on software as a service (SaaS) firms, where it put in $500 million. This again was much lower than its $3.2 billion investment in 2021. At present, its total investment in Indian companies is about $15 billion. It has withdrawn an investment of up to $7 billion.

High growth entities where SoftBank is an investor such as global travel-tech firm Oyo and ecommerce platform Meesho, have been significantly cutting cash burn, which could impact their earlier robust growth, the financial daily cited analysts as saying.

Most companies which have reached the final stage of growth have decided not to raise fresh funds at lower or similar valuations. These companies also want to wait for six months. In such a scenario, there are not many options for SoftBank to infuse new rounds in these companies.

India continues to be SoftBank’s third largest market after the US and China and the top management of the company visited the country in March this year.