SoftBank fully exits Policybazaar parent, collects $650 mn in returns

SoftBank had invested about $200 million in PB Fintech. In Dec 2023, Softbank's arm SVF Python II (Cayman) divested a 2.5 per cent stake in Policybazaar's parent firm PB Fintech for Rs 914 crore

Japanese investor SoftBank has full exited PB Fintech, the parent company of Indian digital insurance marketplace Policybazaar, garnering $650 million on its investment, said a person familiar with the matter.

Masayoshi Son-led SoftBank had invested about $200 million in PB Fintech. “SoftBank has made a total of around $650 million in returns on its investments in the Gurugram-based company,” according to the source.

In December 2023, Softbank's arm Svf Python II (Cayman) divested a 2.5 per cent stake in PB Fintech for Rs 914 crore through open market transactions. HDFC Mutual Fund (MF), Mirae Asset MF, ICICI Prudential Life Insurance, Societe Generale, Capital Group, The Master Trust Bank of Japan, Government Pension Fund Global, Goldman Sachs, and China's Best Investment Corporation were among those who bought the shares.

After that transaction, Softbank's shareholding in PB Fintech declined to 1.85 per cent from 4.39 per cent stake. In October 2023, Softbank pared a 2.5 per cent stake in PB Fintech for Rs 871 crore. In December 2022, Softbank through its affiliates offloaded 5.1 per cent stake in Policybazaar for Rs 1,043 crore.

PB Fintech was co-founded by Yashish Dahiya and Alok Bansal in 2008. The company operates online insurance platform Policybazaar and credit comparison portal Paisabazaar. It made its public market debut in November 2021.

Experts said SoftBank’s strategy over the last one year has been to keep diluting its holding through public market deals. SoftBank was one of the early investors in India's technology companies but it has been paring its stakes, including in Paytm, Delhivery and Zomato.

SVF Growth (Singapore), the venture capital fund owned by Softbank, on December 8 last year exited food delivery firm Zomato via open market transactions. SVF Growth sold the remaining 9.35 crore equity shares, according to the bulk deals data published by exchanges. These shares were sold at an average price of Rs 120.5 per share, amounting to Rs 1,127.5 crore.

SoftBank has invested $15 billion in India, funding nearly one-fifth of the country's over 100 unicorns (a startup worth more than $1 billion). It recently sold stakes worth $1.8-1.9 billion during public offerings and through post-listing sales in Paytm, Zomato, PB Fintech, and Delhivery, startups that went public in 2021 and 2022. The conglomerate invested a total of $2.3-2.4 billion in these four new-age enterprises.

Other unicorns in SoftBank’s portfolio include Ola Electric, Oyo, Lenskart, FirstCry, Meesho, Unacademy, Zeta, Swiggy, Ola Electric and InMobi. Many of these companies are expected to go for an IPO.

Among these startups is Bengaluru-based Ola Electric, which recently filed its draft red herring prospectus (DRHP). Bhavish Aggarwal, 38, the founder of Ola Electric, is set to offload 3.48 per cent of shares in an individual capacity (he has 1.36 billion) as part of the e-vehicle maker’s IPO. Aggarwal will sell around 47.4 million in the SoftBank-backed company, ahead of the firm’s IPO, contributing almost half the offer for sale (OFS) shares.

In consumer technology, FirstCry recently filed its DRHP with Sebi on December 28, 2023. SVF Frog, a SoftBank-operated, Cayman Islands-registered entity, is set to offload over 16 per cent of its stake as part of the OFS in Brainbees Solutions’ (FirstCry.com) IPO.

SoftBank-backed Unicommerce, which provides software-as-a-service to the e-commerce, industry also filed its DRHP with Sebi to raise funds through an IPO. The issue is entirely an OFS aggregating up to 298 million equity shares by the selling shareholders. Under the OFS, SB Investment Holdings (UK) Ltd, an affiliate of Japan's SoftBank, will offload 161 million shares, promoter AceVector Limited (formerly known as Snapdeal Limited) will sell up to 11.4 million shares and B2 Capital Partners will be selling up to 2.2 million shares. Since the IPO is completely an OFS, the entire proceeds will go to the selling shareholders.