Last year, the company had invested around $3.2-3.5 billion in the Indian startup ecosystem - almost 10 per cent of the total investment the sector received. For CY22, the investments may not even touch $1 billion.
"So far, SoftBank has invested around $450-500 million. It is looking at a few more that may take its overall investment in India to $600-650 million," said a person privy to the discussions.
Even as investments in India have declined, SoftBank is also meeting its portfolio firms in India.
The message is clear.
"Have enough cash to sustain for two years. It believes this funding winter will be a fairly long-drawn-out one and recovery will be sluggish," said another source. People familiar with the firm's plans said while the follow-on will be scrutinised and will be supported where required, new investment will be hard to come by. "This year it is going to be very selective. The thought process is that the markets will hit the bottom by early 2023," said another source. The Japanese firm does not see the initial public offering (IPO) market reviving any time soon.
In a marked departure, FirstCry - one of its early India investments - is ready to make its public debut this year.
SoftBank is reaching out to all its portfolio firms as the Japanese fund looks at trimming costs. Sources in the industry said its portfolio firms have been told they should look at conserving cash for at least two years since the fund believes this will be a fairly protracted recovery. Even in terms of IPO, they say it will take at least one to two years for markets to bounce back. Vision Fund (VF)-1 still has $10-12 billion for follow-on investments, but these will be done with greater scrutiny.
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