The subsidiary of Japan’s SoftBank Group, SoftBank Vision Fund, looks to invest $2-4 billion in India over the next two years. The fund looks to bet on financial services space in the country, as it significantly shifts away from its earlier strategy of investing in the internet and tech-based businesses.
The tech-based fund, which has investments in 80 companies over the world, seeks to bring 20 firms in its portfolio to India through joint partnerships with local businesses. The latest announcement follows Softbank’s other vision fund which is in the midst of raising the same $100 billion size as the previous one.
In a statement, SoftBank Group Director and Executive Vice President who heads the SoftBank Vision Fund (SVF), Rajeev Misra stated that “We should be able to pump $2-4 billion in India, which would be through new investments. We will also make follow-on investments aside of fresh ones when our portfolio firms require capital.”
SoftBank founder Masayoshi Son said at the company’s annual general meeting in Tokyo last month that limited partners or sponsors of its Vision Fund were in talks to be a part of the group’s next fund which is expected to be launched soon. As per the media reports, investors who participated in the first fund include the sovereign wealth funds of Saudi Arabia and Abu Dhabi, tech giant Apple, among others.
SoftBank has been facing a lot of challenges in raising its second Vision Fund. The Japanese multinational conglomerate holding company has already invested $10 billion across Indian Startups including Paytm, Oyo, Delhivery, FirstCry, among others. Of those investments, $8 billion came from the Vision Fund. Previously, Misra stated that the fund, which is widely seen as reordering tech investing, will start to cut smaller sized cheques in the range of $100 million in companies which are valued at around $500 million.
India has a diversified financial sector and currently undergoing rapid expansion, both in terms of robust growth of existing financial services firms and new business entrants entering the market. The country has always been attracting private firms, resulting in private equity and venture capital investments in India reached US$ 33.1 billion in 2018.
Today, India is one of the most dynamic global economies in the world, on the back of robust banking and insurance sectors. The country’s financial services sector comprises the capital markets, insurance sector and non-banking financial companies (NBFCs).