India’s most prolific start-up investor, SoftBank, has ploughed close to $8 billion (Rs 570 billion) into the country. On Wednesday, it announced that venture capitalist Sumer Juneja is to head the local arm of its $100-billion Vision Fund.
The Japanese firm also said it would be opening its first India office, in Mumbai, as it looks to better support its portfolio companies in the region and expand further.
Juneja will join the Vision Fund from Silicon Valley-based Norwest Venture Partners, where he led the latter's investment in food ordering app Swiggy, online classified entity Quikr and others. The London School of Economics graduate worked with Goldman Sachs as an investment banker, prior to joining the venture capital (VC) firm in 2009.
“Sumer will play a pivotal working with our existing portfolio companies, as well as sourcing new opportunities. India represents an enormous addressable market, comprising a young, tech-enabled population,” said Rajeev Misra, chief executive officer (CEO) at SoftBank Investment Advisors (Vision Fund) and board director, SoftBank Group. Unlike many peers in the VC space, Juneja doesn’t have an entrepreneurial background. He is said to be strong in finance skills, so acknowledged by the founders of companies where he led investments. In the run-up to his investment in Swiggy, he is said to have accompanied delivery executives on their bikes to assess the company’s customer service, as part of the due-diligence process.
SoftBank is known to be exploring several opportunities in India, including companies such as baby and mother care portal FirstCry and logistics player Delhivery. Other SoftBank portfolio companies such as Oyo, Ola and Paytm are aggressively expanding abroad as they look to take the efficiencies they’ve built in India to global markets.
SoftBank says it put $5 billion (around Rs 350 billion) into only four Indian companies — Paytm, Oyo, PolicyBazaar and Flipkart. The company made a name for itself in providing growth capital to start-ups and has been doing much the same in India. Masayoshi Son, chairman of Softbank Group, has made several visits here over recent years, meeting Prime Minister Narendra Modi on several occasions.
The Japanese firm also counts Hike and Grofers as portfolio firms in India. However, SoftBank’s run here hasn’t been glitch-free. Its investment in online realty platform Housing.com turned into a nightmare when investors voted to dismiss co-founder and CEO Rahul Yadav from the position, a little while after which the company was sold to rival PropTiger in an all-stock deal.
By far SoftBank’s biggest failure in India was its investment in Snapdeal, where it was forced to completely write off the nearly $1 billion it had invested in the Kunal Bahl-cofounded company that competed with Flipkart and Amazon.
The investment firm’s heavy handedness in trying to get Snapdeal to sell out to Flipkart also earned it scorn from other investors and India’s VC community.
However, the losses made on Snapdeal were covered by the company’s exit from Flipkart, where it invested $2.5 bn in August 2017. Less than a year later, when Walmart acquired 77 per cent of Flipkart's equity for $16 bn, SoftBank reaped a return of 60 per cent, receiving $4 bn from the US retail giant.
In August, SoftBank said it had set aside $648 million to be paid as short-term capital gains to the Indian government, as its exit from Flipkart had come within 24 months of its initial investment in the firm.