Japanese investor SoftBank is looking to resume investments in Indian startups in coming months, after pausing bets for the last 18 months amid a broader funding winter, Sumer Juneja, head of India and EMEA at SoftBank Investment Advisers, has said.
Speaking to Moneycontrol, Juneja said, “In 2022 and early 2023, all investors, especially early-stage investors since they have a much more extensive portfolio, were focused on ensuring their portfolio reduces burn and survives the funding winter. It resulted in decreased deal-making across the board. As Seed and Series A/B deals have picked up in the second half of 2023, you will see an increase in the pipeline for growth investors.”
He said founders will come to terms with a reset in valuations this year and will be open to repricing themselves, while cheque sizes at the growth stage could also moderate. Last year saw a significantly lighter deal flow and prolonged decision-making across the board, that led to lowest funding in seven years for tech startups.
“We will do smaller cheques only if the market dynamics require it, especially since companies have become more capital efficient and want to raise less. We are excited about the India story and will not sit on the sidelines. We will be fine investing $50 million, but ideally not lower than that. An investment below $50 million will not move the needle for SoftBank,” Juneja said.
SoftBank has so far invested about $11 billion into Indian startups, primarily at growth stages, since it began operations in November 2018, including in companies such as Delhivery, Lenskart, Policybazaar, Meesho, Mindtickle, and OfBusiness. It has pared its stakes in companies such as Zomato, Paytm, Delhivery and Policybazaar.
On exits, Juneja said, “There is performance of companies and then there is a factor of how robust the market is. So, whenever there’s an opportunity, we will sell.” Exits are important for any investor to remain excited about investing, he said. “As disciplined as you are going in, you have to be as unemotional and disciplined coming out.”