Paytm is insured by SoftBank’s Vision Fund 1, contributed the fund with a net loss of $407 million. the fund at the time on June 30, 2022.
Delhivery contributed $510Mn of profit Vision Fund 1, while Policybazaar provided $384 Mn of profit to Vision Fund 1.
SoftBank posted an operating deficit of $24.5 Bn for the quarter ending June with an income of $5.6 Bn in the prior quarter.
Japanese firm of investment SoftBank is a major investor in Indian startups, posted the largest loss in its history during the period ending June 30 2022. This explains the current pressure on tech stocks around the world.
SoftBank’s net loss during Q1 FY22 was 3.12 trillion Japanese dollars ($24.5 Bn) in contrast to an income that was 761.5 billion Japanese dollars ($5.6 Bn) recorded in the comparable period last year. The loss for its Vision Fund stood at 2.93 Tn yen ($21.7 Bn) in the June quarter.
In the past year, companies like Paytm, Delhivery and Policybazaar from SoftBank’s India portfolio were listed on the market. The shares for Paytm as well as Policybazaar are trading more than 57 percent and 51% less and 51% lower than their initial listing in the year before however, the shares of Delhivery are rising by 30.4 percent from their initial listing.
Paytm is supported by SoftBank’s Vision Fund 1, contributed an estimated loss of $407 million to the fund on June 30th 2022. SoftBank has invested $1.6 Billion in Paytm in the past, and its current valuation is $1.19 Billion.
Additionally, Delhivery contributed $510 Mn of its gross profits towards the funds, and Policybazaar made a profit of $384 million towards Vision Fund 1. This fund is investing $397Mn and $199 million into Delhivery and Policybazaar in the past and the current value is $907 million and $583 million according to SoftBank Group’s earnings report.
Other Startups in India Portfolio
SoftBank has supported startups such as Blinkit, Cars24, Meesho, Lenskart, among others in India.
in 2014, SoftBank announced a goal of investing $10 billion into Indian startups in 10-year intervals. According to latest reports, it appears that the company invested more than $8 billion in India in the last five years and was well on its way to meet its goal before 2024.
SoftBank invested more than $3 billion in India through 17 deals in 2021, which included Meesho, Zeta, and OfBusiness.
While its portfolio of companies like Paytm remain losing money. Although Paytm is seeing a reduction in losses over time however, its Q1 FY23 consolidated net loss grew by 69%, to 645.4 Cr when compared to the same quarter in the previous year.
On the contrary, OYO, a SoftBank-backed non-listed startup which is owned by SoftBank, has put off its long-awaited IPO scheduled originally scheduled for 2022 because of the slowing market. There were reports that suggested a potential for the hotel unicorn decreasing the size of its IPO size.
SoftBank is believed to have 46% of OYO.
Within SoftBank’s investment portfolio for international markets, Chinese ride-hailing platform DiDi Global has contributed $9.37 Bn in gross losses in Vision Fund 1, followed by WeWork with $3.04 Bn in gross losses.
Tech stocks listed on the market are being relegated to the secondary market because of rising inflation pressures, tightening central bank monetary policies and the fear of an imminent recession in the midst of war in Europe. SoftBank has also attributed its record losses to the decline in the Japanese yen.
With the current economic downturn, SoftBank said that its Vision Funds have heightened the discipline of investing, and are focused on a substantial reduction of operating costs, and increasing the value of the portfolio currently.
In Q1 FY22 The Funds approved investment of $0.6 Bn as against $2.4 Bn that was approved in the previous quarter. It was the first time that the Funds had approved an investment for $20.6 Bn in the corresponding quarter of the prior year.
Softbank has also announced a buyback of shares of $400 Bn yen over a year beginning on the 9th of August.