“These are early days– Indian capital markets are quite deep, may not happen in future but today they are absorbing big IPOs like Paytm, Zomato, Nykaa, Policybazaar. This is recognition of India market because historically It happened since then that people had invested in India but there was no exit except the Walmart-Flipkart deal,” Munish Verma, managing partner at SoftBank Vision Fund, told ET in an interview. Verma said it will be important to see how each of these companies perform over the 12 months and see how the markets react to their financial performance.
softbank
Sold $250 million worth of PB Fintech shares Its listing is headed by the company’s market cap of $8 billion as of Tuesday, while its remaining stake is worth about $900 million.
In One97 Communication, the parent of digital payments platform Paytm, the Japanese conglomerate held approximately $225 million and the value of its holding is $3.6 billion, taking the upper end of the company’s IPO issue price at a valuation of $20 billion. goes. Paytm will be
biggest ipoHis anchor book was super strong and he had very smart investors who believed in him and we believe in him, Verma added when asked about the expectations from the company’s listing.
Open for investment in fintech after paytm listing
Having missed out on betting on the fintech, payments and broader financial services sector due to its $1.6 billion investment in Paytm, the fund will now actively seek opportunities in the space.
“Lending is a big opportunity, payments and affiliate businesses are a big opportunity and all these businesses collect huge amounts of data. The winner will be the one who can take all this data collected and turn it into some monetizable product. — for example insurance manufacturing,” Verma said.
ETtechSumer Juneja, SoftBank Vision Fund, Partner and Head of India, SoftBank Vision Fund, said, Financial Services is not a winner-take-all market or monopoly and there will be only one or more than two winners. “In financial services, if you look at HDFC Bank, it has a market cap of $120 billion, but their market cap is around 9%. So given the depth of financial services, I don’t think it matters whether you are number one or number two and some of it is meaningless because UPI (P2P) doesn’t make you any money…”
Private vs. Public Evaluation
Given the current frenzy, many startups are ready to go the IPO route, but their business fundamentals have been questioned and whether they can survive the scrutiny of public markets.
“When good companies come into the market, they will always be welcomed…. Let’s say the market goes down from its high, but a company like Delhivery would be welcome even in a tough market. Maybe they won’t debut at more than $6 billion valuation and it may be 10-15% lower, but IPOs are here to stay for good companies….,” Verma said. Logistics and Supply Chain Company Delhivery
filed its draft IPO prospectus with the Securities and Exchange Board of India (SEBI) to raise Rs 7,460 crore Through Initial Public Offering (IPO). SoftBank holds around 22% stake in the Gurugram-based firm.
Verma said the current market capitalization of recently listed companies will determine the personal valuation of their competitors. “Public market valuations are richer than private markets right now, but markets are efficient and transparent. The gap between private and public doesn’t last very long. Hence the next funding round for Swiggy will be benchmarked on Zomato’s market cap…., he said. ET reports that SoftBank-backed Swiggy is
Finalizing a new financing round of approximately $500-600 million It could be led by US asset manager Invesco, which could raise it to $10 billion, more than double the valuation it was given a few months ago.
SVF-2 and its strategy
Meanwhile, Vision Fund 2 has taken a different approach in investing through this vehicle by writing small checks across a wide range of companies. Masayoshi Son, Founder and CEO, SoftBank,
said earlier this month That the size of the investment per transaction in Vision Fund 2 has shrunk to one-fifth of that of Vision Fund 1. This, he said, makes the allocation strong and diversified.
Verma said the Vision Fund 1 venture was ‘behind the curve’ on SaaS (software-as-a-service) investments. “There was not enough investment in Vision Fund-1 mother-in-law And we should have made more stakes in venture SaaS than Vision Fund 1,” he said. SoftBank’s record $100 billion Vision Fund-1, which was launched in late 2017, began by making sizable investments, which Verma said kept stage SaaS firms away as they usually opt for such large funding rounds. do not choose. SoftBank has since supported SaaS startups such as
whatfix And
bickering,
Son-led SoftBank has also been seen as being too aggressive on offering hefty valuations to clinch startups. deal But Verma said the Japanese group is not “insensitive” to the assessment. “I’m looking at an insurance company in the US. It’s expensive but TAM (total addressable market) is so huge, whether I pay a valuation of $3.5 billion or $3.75 billion, it doesn’t matter because if I Doing it right will result in $20 billion. So, 4-5% up or down doesn’t matter…”