In Uber IPO, SoftBank will walk away a winner

Trading started on Friday evening (Indian time) on one of the biggest and most anticipated Initial Public Offering (IPO) of recent times—Uber. Shares of the world's leading cab hailing aggregator will be listed at the New York Stock Exchange at $45 apiece, taking valuation of this company to 82 billion dollars. While analysts and experts have voiced their own worries at the medium-to-long term prospects of Uber's stock, everyone agrees on one thing—SoftBank will walk from it a winner.

SoftBank, who? For many among the general public in India, that may be the initial reaction. But if the funding spree this Japanese conglomorate has had in India in the last few years is any indication, this is one investor whose name we will be hearing a lot more in the coming days. Just on Thursday, as SoftBank revealed its annual results, surprising with a higher than expected profit, it was clear that its connection to the India story had started reaping benefits. Profits were up by more than a third to more than 12 billion dollars, largely due to money flowing in from its successful investments in India. To be specific, dividends from its investment in OYO hotels, as well as the gains accrued in the sale of its stock in Flipkart as the Bengaluru-based ecommerce company was taken over by American titan Walmart last year.

And these are just two among a wide portfolio of investments SoftBank has made in India. From local ride-hailing giant Ola to online shopping portal Snapdeal to payments platform PayTM to grocery delivery app BigBasket, some of the biggest technology start-ups in the country are fuelled by the money pumped in by SoftBank. Many of them through its Vision Fund corpus of 100 billion dollars, most of it raised from oil-rich countries like Saudi Arabia and the United Arab Emirates. In fact, some recent reports have suggested that SoftBank has used up most of this fund, and is raring to go by raising another round of 100 billion for investing.

And, there could be a lot in it for India. Since formally entering the country a few years ago, SoftBank had set a blistering pace, outpacing major investors in the country like Naspars and Tiger Global LLC to become the biggest investor in the country. According to one report, barely a year after it entered India, the company had dispersed 2 billion dollars across five Indian firms. Some of them, like OYO and possibly Ola, worked, while some, like the property search platform Housing.com, came a cropper.

In fact, during the half-decade or so it has made its presence felt in India, it was hardly like a goose that laid golden eggs all the time. Even as the OYO and Flipkart investments led to a windfall, there are other investments that experts are looking at closely with frown lines in place. This ranges from some reports which claim that Ola, the successful local ride-hailing unicorn, is trying to distance itself from SoftBank, as the latter has investments in similar businesses across the world (Uber being the most famous example), to how its PayTM bet may reportedly be in for troublesome period ahead once other players like Google and WhatsApp get active.

Yet, all that seems to be on par for the course. According to a report earlier this week, SoftBank is said to be setting aside 20 billion dollars for investing in solar and technology-led businesses in India. It is clear that SoftBank is in India for the long run, hungrily looking around for fresh start-ups and newer ideas to throw money at. As Masayoshi Son, the founder and head of SoftBank famously declared while on a visit to India two years ago, “There are good times and bad times. But SoftBank is always there.”