Masayoshi Son, BFSI News, ET BFSI

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BENGALURU: SoftBank is the biggest foreign investor in India’s startup ecosystem, the Japanese conglomerate’s founder and CEO Masayoshi Son said on Friday at the Infinity Forum, a thought leadership forum on fintech..

Son said that he had made a commitment to Prime Minister Narendra Modi that he would invest $5 billion in India, but in the last ten years, Softbank has already invested $14 billion. This year alone it has invested $3 billion.

“We are providers of about 10% of the funding to all unicorns in India,” Son said.

SoftBank’s investments in India include those in Flipkart, Paytm, Swiggy, Zeta, among others. “I believe in the future of India. I believe in the passion of young entrepreneurs in India. I tell the young people in India—let’s make it happen, I will support,” he said.

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SoftBank may invest $10 billion in Indian startups in 2022, BFSI News, ET BFSI

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SoftBank Group Corp. can invest $5 billion to $10 billion in India next year if it finds valuations attractive, said Rajeev Misra, chief executive officer of SoftBank Investment Advisers.

“If we find the right companies, we could invest $5 billion to $10 billion in 2022,” Misra said on Thursday at the Bloomberg India Economic Forum. “If we find the right opportunities at the right valuation.”

So far, investments in India haven’t disappointed the Japanese giant with its portfolio of startups in the country sitting atop sizable gains in valuations. SoftBank is planning to raise the stakes in India — having invested $3 billion in 2021 — just as global firms grow more wary of bets in China with tighter regulations across a number of industries hurting deals there.

India has been a bright spot for SoftBank, whose Vision Fund reported a record loss of 825.1 billion yen ($7.2 billion) for the quarter ended in September, on the decline in value of public holdings such as the Korean e-commerce giant Coupang Inc. and the Chinese ride-hailing giant Didi Global Inc. The Japanese company invested early in the Indian market, taking a stake in ride-hailing giant Ola and e-commerce leader Flipkart, before its acquisition by Walmart Inc.

SoftBank also invested in digital payments pioneer Paytm, which is poised to raise $2.5 billion in its initial public offering. Oyo Hotels & Homes, also backed by SoftBank, filed preliminary documents for an 84.3 billion rupee ($1.1 billion) initial public offering in October.

India’s tech ecosystem is taking off and SoftBank’s patience will be “rewarded,” Misra said. “It is India’s time.”



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SoftBank shares jump 11% on $9 billion buyback, BFSI News, ET BFSI

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TOKYO – SoftBank Group Corp shares jumped 10.5% on Tuesday, the first trading session after the Japanese conglomerate said it would spend up to 1 trillion yen ($8.8 billion) buying back almost 15% of its shares.

The company announced the buyback, long speculated about by the market, after it revealed its quarterly earnings crashed to a loss amid a decline in the share prices of its portfolio companies and a regulatory crackdown in China.

SoftBank‘s shares closed at 6,808 yen in its biggest daily rise in 11 months, lifting the group’s market capitalization above $100 billion. Tuesday’s trading volume was more than twice the 30-day average.

The buyback is SoftBank’s second largest after a record 2.5 trillion yen buyback launched during the depths of the COVID-19 pandemic last year. Shares of the tech group quadrupled during that buyback, but have since fallen 40% from a peak in May.

“Our analysis of buyback history indicates that SBG stock performs (and outperforms indices or BABA) during buybacks,” wrote Jefferies analyst Atul Goyal in a note, referring to Alibaba, the group’s largest asset. SoftBank owns about a quarter of Alibaba’s shares.

The slide in the Chinese e-commerce giant’s shares and the broader regulatory backlash in China contributed to a $57 billion fall in SoftBank’s net assets to $187 billion, a metric that Chief Executive Masayoshi Son has said is the primary measure of SoftBank’s success.

(For graphic on Buyback dependence Buyback dependence: https://graphics.reuters.com/SOFTBANKGROUP-SHARES/byprjkkkdpe/chart.png)

The repurchase period for the latest buyback runs to Nov. 8 next year, with the group signalling the programme could take longer than the fast-paced purchases last year.

The buyback “is nice support, but it isn’t rocket fuel,” wrote LightStream Research analyst Mio Kato on the Smartkarma platform, adding “there are material downside risks if broader tech, especially unprofitable tech, falters.”

Speculation that SoftBank could launch a buyback has been raging for months as the discount – the gap between the value of its assets and its share price – has lingered to the frustration of executives and as investors push for repurchases.

Ongoing uncertainties include the prospect of gaining regulatory approval for the $40 billion sale of chip designer Arm to Nvidia.

Delays to the sale “may have given Softbank the flexibility to announce a buyback now with expectations of ramping up share purchases later,” Redex Research analyst Kirk Boodry wrote in a note.

SoftBank is ramping up investing via Vision Fund 2, which has $40 billion in committed capital from the group and Son himself, even as it winds down activity at trading arm SB Northstar.

“Even if the company manages its finances with a certain amount of discipline, share buybacks would likely erode the financial buffer if executed,” S&P Global Ratings analysts wrote in a note.

The conglomerate held more than 5 trillion yen in cash and cash equivalents at the end of September, an increase of 9% compared to six months earlier.

($1 = 113.3500 yen)



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SoftBank dragged into red by falling Vision Fund valuations, BFSI News, ET BFSI

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SoftBank Group Corp reported a 397 billion yen ($3.5 billion) net loss for the July-September quarter, dragged down by a $10 billion investment loss at its Vision Fund unit as tech valuations fell.

While CEO Masayoshi Son describes SoftBank as a goose laying “golden eggs”, referring to its stakes in startups that go to market, initial public offerings (IPOs) have dropped off and shares in many top assets like online retailer Coupang fell during the quarter.

“The strategy of let’s create the perception of enhanced value by taking things public hasn’t really worked this year,” Redex Research analyst Kirk Boodry said.

Depressed valuations in SoftBank’s China portfolio amid a regulatory crackdown continued to drag with its stake in ride-hailer Didi, acquired for $12 billion, currently valued at $7.5 billion.

The group’s largest asset, Chinese e-commerce firm Alibaba, fell by around a third in the second quarter.

SoftBank’s quarterly net loss compared with a profit of 628 billion yen in the same period a year earlier.

Bright spots for the Vision Fund include its India portfolio with ride-hailer Ola and logistics firm Delhivery targeting listings.

SoftBank has been trimming stakes following the expiry of lock-up periods, while focusing on investing through its second Vision Fund that has $40 billion in committed capital from SoftBank itself.

SoftBank shares, which have lost around a quarter this year, closed down 0.77% at 6,161 yen ahead of earnings on Monday.

($1 = 113.3500 yen)



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Rs 45,000 crore IPOs set to fuel India Inc’s capex plans, BFSI News, ET BFSI

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The huge fundraise by companies and start-ups through initial public offerings is set to drive the capex engine of India Inc. With abundant liquidity and a rise in stock market fortunes, companies are rushing to raise money via the primary route.

At the forefront of the fundraising are start-ups, which are flocking the stock markets with astronomical valuations, though many such as Zomato are yet to turn a profit. Investors are eager to buy into these IPOs, banking on growth opportunities that digital reach has afforded to these nascent companies.

The startups being listed are joining the broader India Inc, which is on cusp of a burgeoning investment capex cycle as several indicators show.

While a chunk of the IPO money is going as returns to early investors who had bet on the potential of these companies, such as Ant Financial and Softbank offloading stakes through offer for sale in the Paytm IPO, huge capital is being available for further growth initiatives.

IPO rush

At least 30 companies are looking to collectively raise over Rs 45,000 crore through IPOs during October-November. Of the total fundraising, a large chunk would be garnered by technology-driven companies, including FinTechs.

The firms that are expected to raise funds through their IPOs during October-November include Policybazaar (Rs 5,710 crore), Emcure Pharmaceuticals (Rs 4,500 crore) Nykaa (Rs 4,000 crore), CMS Info Systems (Rs 2,000 crore), MobiKwik Systems (Rs 1,900 crore). In addition, Northern Arc Capital (Rs 1,800 crore), Ixigo (Rs 1,600 crore), Sapphire Foods (Rs 1,500 crore), Fincare Small Finance Bank (Rs 1,330 crore), Sterlite Power (Rs 1,250 crore) RateGain Travel Technologies (Rs 1,200 crore) and Supriya Lifescience (Rs 1,200 crore) may float their IPOs during the period under review.~

Fund deployment

While Nykaa has said that it will use the IPO proceeds to set up new retail stores, fund capital spending and repay debts, PolicyBazaar plans to use Rs 1,600 crore of the proceeds to enhance visibility and awareness of its brands including Policybazaar and Paisabazaar, Rs 375 crore will be used for new opportunities to expand growth initiatives to increase its consumer base including offline presence, Rs 600 crore for funding strategic investments and acquisitions and Rs 375 crore for expanding its presence outside India. Keventer Agro will use the proceeds of Rs 155 crore will be used to repay debt and Rs 110.76 crore will be used for funding capital expenditure requirements. Start-up fundraising

The funds raised by Indian unlisted startups have crossed the $10 billion mark spread across 347 deals, according to PwC India. This was twice the amount of funding received in Q3CY20 and was up about 41% over the second-quarter figure.

The increase in funding activity was noted across all sectors, both by value and volume.

Fintech, Edtech and SaaS were the top three hot investment sectors in CY21, together accounting for about 47 per cent of the total funding activity. The fintech sector saw a four-fold increase in funds raised in the first three-quarters of CY21, over the first three-quarters of CY20. Six fintech companies reached unicorn status.

Editors View is a weekly column written by Amol Dethe, Editor, ETCFO. Click here to read his previous columns.



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SoftBank, Amazon, Accel invest $108 mln in banking platform Pismo, BFSI News, ET BFSI

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SAO PAULO, – Brazilian banking and payments tech platform Pismo raised $108 million in an investment round led by Japan’s SoftBank Group Corp, Amazon.com Inc and global venture capital firm Accel, it announced on Tuesday.

According to Pismo, which was founded in 2016, its second funding round is aimed at fueling the company’s global expansion and accelerating the development of banking technologies.

Brazilian stock exchange operator B3, Falabella Ventures, PruVen and existing investors Redpoint eventures and Headline also joined the round, Pismo said, without disclosing its valuation.

“Pismo is now ready for a new phase of growth. On the back of this funding round, we will build further on the momentum and scale we already have in Latin America, and accelerate international expansion,” Pismo Chief Executive and co-founder Ricardo Josua said in a statement.

Pismo said its cloud-native platform for financial institutions hosts more than 25 million accounts and transacts more than $3 billion a month, adding that firms like Brazilian banks Itau Unibanco Holding SA and Banco BTG Pactual SA are among its customers.

The company expects to launch offices in Austin, Texas, Bristol, England, and Singapore following the funding round.

“(Pismo is) uniquely positioned to reinvent the technology behind banking, payments, fintech, and commercial transactions. The founders have great ambitions to make Pismo a truly global company,” SoftBank’s head of Brazil and operating partner Alex Szapiro said. (Reporting by Gabriel Araujo; Editing by Sandra Maler)



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Deep Nishar, the man part of 36 investments, announces exit from SoftBank Vision Fund, BFSI News, ET BFSI

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Deep Nishar, a senior managing partner at SoftBank Vision Fund, announced his exit from the company today.

Nishar holds a top management post in the company, with only three executives outranking him, including Masayoshi Son, founder and chairman of SoftBank Group Corp.

In a LinkedIn post, Nishar said he would be leaving the firm at the end of the year. He has worked with the company for six years.

“I will bid adieu to my amazing team and colleagues at the end of this year. With much gratitude for the honor and privilege of serving the SoftBank family,” Nishar said in the LinkedIn post.

The reasons for his exit were not mentioned in the LinkedIn post.

Nishar is an IIT-Kharagpur alumnus, and has served on several public and private company boards, including Automation Anywhere, Cohesity and Slack.

Nishar joined SoftBank in 2015, and is based in US’ San Franciso Bay area.

With over 20 years of experience in helping build software businesses, Nishar has served as an asset to SoftBank, co-authoring 14 patents, and being involved in 36 investments, which include eight IPOs and two M&As.

Before SoftBank, Nishar played a pivotal role in LinkedIn as the site’s product head. He helped the site grow from 32 million members to 347 million, and annual revenue increased from $78 million to $2.22 billion.

Before LinkedIn, Nishar held several leadership roles at Google.

He was also the founder of enterprise software company Patkai Networks.

Apart from his strong technical background, Nishar has also been a lecturer at Stanford University.



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SoftBank-backed Snapdeal weighs $400 million IPO, BFSI News, ET BFSI

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Indian e-commerce retailer Snapdeal Pvt is considering an initial public offering that could raise about $400 million, joining a growing list of startups preparing to tap capital markets as the nation’s digital economy booms.

The company, which counts SoftBank Group Corp. among its investors, is speaking with advisers about a potential listing in Mumbai that could value it at as much as $2.5 billion, the people said. An IPO could take place as soon as next year, they said, asking not to be identified because the details aren’t public.

Discussions are still at an early stage, and the firm could decide not to proceed with the plan, the people said. Representatives for Snapdeal and SoftBank declined to comment.

Snapdeal, based in the New Delhi suburb of Gurgaon, was once one of the country’s top three e-commerce firms along with Flipkart Online Services Pvt. and the Indian unit of Amazon.com Inc. Founded in 2010, it offers more than 60 million products across 800 categories on its platform and delivers to more than 6,000 cities and towns across the country, according to its website.

Four years ago, Snapdeal walked away from a potential merger with Flipkart, which would have united the two local-e-commerce companies against Amazon. Since then, Flipkart sold a controlling stake to Walmart Inc. and is now progressing towards its own IPO.

The amount raised through IPOs in India so far in 2021 has already surpassed the total gathered in the last three years. The pipeline for the rest of the year includes payments service provider Paytm, online insurance platform Policybazaar and e-commerce beauty startup Nykaa.



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Report, BFSI News, ET BFSI

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SoftBank Group Corp sold 11.4 million shares of food delivery company DoorDash Inc, marketed via Goldman Sachs Group Inc, a source familiar with the matter said on Thursday.

They were priced at around $182.95 each, a Bloomberg report said, valuing the sale at around $2.2 billion. Shares of DoorDash were last down around 5.3%.

The share sale comes a week after DoorDash, in its quarterly earnings report, predicted a seasonal decline in order rates and new customer addition in the current quarter.

The company had reported a bigger loss in the second quarter than expected as it spent heavily to expand internationally and into a crowded market for grocery during the pandemic.

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Global banks include Zoom in their apps for business communications, BFSI News, ET BFSI

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BFSI companies, which have been operating out of employee homes during the pandemic, are tying up with Zoom as they aggressively adopt virtual communication models.

“A few big global banks have already entered into this collaborative model with Zoom. HSBC UK has expanded its use of video appointments using Zoom. The customers can get mortgage advice, upload any supportive evidence onto the system, and take out a mortgage via this collaborative technology,” Harry Moseley, CIO, Zoom, told ETBFSI.

In a deal between Goldman Sachs Japan and SoftBank group, the Goldman Sachs group set up a framework to coordinate with a 60 member sales team via Zoom.Stressing on the importance of Zoom in banking communications, Moseley said, “If I am selling banking products to you, if I am talking to you about portfolio or investment strategies, etc., the natural tendency of people is to express their positive or negative sentiment. These nonverbal cues are super important.”

Collaborative models

BFSI companies are investing in partnerships and collaborative models involving new tech to stay relevant in a rapidly evolving space. Embedding the Zoom elements in banking, financial services, and insurance apps can help in enhanced customer interaction, Moseley said.

“Financial services in general look forward to reducing the friction to connect with their clients. With virtual communications, they have seen an uptick in volumes and uptick in interactions, and an uptick in a sort of ability to connect with clients,” Moseley said.

Changing work structure

The BFSI sector has been aggressive in adopting digitization. Given the pandemic, they are looking for more collaborations and capabilities in the virtual environment.

“Organisations today need to rethink the whole office structure. Offices need to be collaborative and physically safe. There should be inclusivity, collaboration and safety in the work environment,” Moseley said. “Work is not a place. Work is something we do,” he said.

Zoom has more than 300 million users and can accommodate 50,000 people at a time.



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