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Oyo uncertainty and Paytm pain can’t slow SoftBank’s Indian gravy train

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Nikhil Patwardhan

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Gaurav Tyagi

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Nikhil Patwardhan

25 reads
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Gaurav Tyagi

29 reads

SoftBank's two biggest investments in India—Paytm and Oyo—haven’t given the VC firm much to write home about. Still, the Japanese investor remains pleased with its portfolio in the country, thanks to the billions of dollars of returns it is expected to reap from its other investments.

February 20, 2024

9 MINS READ

Key Takeaways

  • SoftBank is set to lose at least $100 million on its biggest Indian investment, Paytm, after the RBI crackdown on the fintech unicorn
  • There's uncertainty of a large exit event from SoftBank's second-largest investment in the country, Oyo
  • But SoftBank is poised to net billions of dollars of returns from three of its portfolio companies, which are expected to go public soon
  • SoftBank's private portfolio also seems to be shaping up well with many of its largest bets moving towards profitability and prepping to go public in the coming years

Despite being SoftBank’s third largest market, India doesn’t enjoy the attention it deserves on the Japanese venture capital giant’s earning calls. But with two of SoftBank’s biggest Indian bets—Paytm and Oyo—currently swimming against the tide, the VC giant’s India portfolio was bound to come under scrutiny.

Oyo, in which SoftBank has invested over Rs 10,000 ($1.24 billion) crore for a 45% stake, has failed to go public despite publishing its draft prospectus some two and a half years ago. Instead, despite repeatedly inching towards a public listing, Oyo is reportedly raising another private funding round instead, extending SoftBank’s wait to finally monetise its second-largest Indian investment.

Meanwhile, Paytm, SoftBank's largest investment in India, is arguably in worse shape. While the fintech unicorn went public in November 2021, it has seen the value of its stock plummet by nearly 60% in the past month due to a crackdown by India’s central bank, the Reserve Bank of India. This leaves SoftBank, which still holds an almost 6.5% stake in Paytm, facing potential losses.

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