Silicon Valley Bank crisis: Softbank’s investment deals might be under lens after SVB collapse

Following the sudden collapse of the Silicon Valley Bank (SVB) last week, the scrutiny over other lenders, such as SoftBank Group Corp's. investments, will be heightened in the coming days. The start-up-focussed bank’s failure, which was a favourite lender for tech start-ups in particular, has made investors jittery. A Bloomberg report said that the shaken confidence of the investors might even bring down SoftBank Group Corp's share further. 

Masayoshi Son-controlled investment major SoftBank, which has invested more than $140 billion into companies ranging from WeWork to ByteDance Ltd and DoorDash Inc, has plunged 13 per cent in four sessions in market value since news of SVB’s troubles broke. The SVB crisis, which was a one-stop platform for tech entrepreneurs, offering loans, money management services and personal mortgages, has brought the spotlight on private tech investments. 

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'Start-ups' funding conditions were getting harder and the window for IPOs was narrowing even before SVB’s failure," Tetsuro Ii, chief executive at Commons Asset Management Inc. told Bloomberg News on Wednesday. 

Li said that to avoid an SVB-like situation, SoftBank might have to mark down the value of private companies it has invested in. He said that Softbank's most notable publicly traded investment in Alibaba Group Holdings Ltd will be under lens as Alibaba Group Holding's shares have been down 30 per cent in March from a January high due to a selloff in Chinese stocks. 

On its part, SoftBank has said that its operations would barely be impacted by the US lender's collapse. 

Softbank’s investment in India 

Softbank has invested around $15 billion over the past decade in nearly a fifth of India’s 100 unicorns, as per reports. In 2022, it invested about $500 million into Indian start-ups, while in 2021, it invested over $3.2 billion.  

Some of its prominent investments include Ola, Oyo, Paytm, Snapdeal, and Flipkart, while Lenskart, Firstcry, Meesho, Unacademy, OfBusiness, and Delhivery, are among its newer investments. 

Some of the important investments by Softbank in 2022 were Flipkart’s $3.6 billion round, Eruditus’s $650 million round and Meesho’s $645 million round.  

It also participated in Unacademy’s $440 million funding round and Swiggy’s $451 million round, as per data intelligence platform Venture Intelligence (VI). 

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In addition to this, SoftBank has also exited many start-ups by offloading stakes across listed firms like Delhivery, Paytm and Policybazaar. 

It exited from Paytm’s parent One97 Communications and Policybazaar’s primary firm PB Fintech in 2022, whereas it sold shares in logistics unicorn Delhivery in May last year. 

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