SUMMARY
SoftBank plans to back startups that are innovating in sectors with limited disruption
SoftBank is in the process of securing investors for its $108 Bn Vision Fund II
The Japanese VC’s most recent investment in India was in Lenskart
SoftBank has said it is planning to increase its focus on India’s healthtech, edtech and software-as-a-service (SaaS) sectors for new investments in 2020. After investing in over 15 startups in India, the Japanese venture capital major is now preparing a new corpus for its next phase of investments in the Indian market.
Sumer Juneja, partner and India head at SoftBank Investment Advisers, said, “We haven’t seen outcomes in education and health. I think education in India has to be available to everyone. It is an essential product. It is very important for the economy. It is something people want to spend their money, time and effort on.”
Juneja noted that delivering high-quality and affordable education is a big opportunity for startups. “You’ve seen disruption in ecommerce, logistics, digital media and entertainment, but the disruption on edtech is still limited,” he said. He added that healthtech and enterprise tech, particularly SaaS, are the other big opportunities in the Indian startup ecosystem.
SoftBank Banks On Global Appeal Of Indian Innovation
Talking about Indian startups going global and expanding to newer geographies, Juneja highlighted that “In the world of technology and internet, it is an open market with open disruption. Certain economies might be closed, but 95% of the world is open because of technology and the internet. SoftBank finds the right entrepreneur with the right model and if they are disrupting in India, they can go anywhere in the world.”
He also joined the chorus of investors saying that any entrepreneur able to build successfully in India with all its “constraints” can be successful anywhere in the world.
Citing the example of SoftBank’s portfolio companies such as Ola, Paytm and Lenskart, Juneja pointed out that besides funding, SoftBank also looks at finding niches and markets where its portfolio companies can move into. “Ola is now operating in the UK, Australia and New Zealand. OYO has gone international and Paytm is planning to go global as well,” Juneja said.
The announcement comes at a time when SoftBank is in the process of raising funds for its $108 Bn Vision Fund II. In December 2019, SoftBank Vision Fund’s (SVF) CEO Rajeev Misra said that the fund is likely to announce its first close of $30 Bn soon. He also noted that SoftBank has received a commitment of $38 Bn for the second fund so far.
From its Vision Fund II, SoftBank invested $231 Mn in Lenskart as a part of the company’s Series G funding round. But more recently SoftBank has been in the news for the mass layoffs at many of its portfolio company — including 3K employees laid off at OYO.
Earlier this month, SoftBank appointed Manoj Kohli as its India head. Kohli, who comes with more than 40 years of experience, will be in charge of government relations and public policy efforts. This comes after a nearly five-year stint as the chairman of SoftBank’s renewable energy business SB Energy. In his new role, Kohli will be supporting SoftBank, SoftBank Vision Fund and the VC’s vast portfolio.
