Softbank group has one of the largest investment arms in the world named Vision Fund. It has a valuation of around $100 billion for making investments around the world. The bank’s founder Mr Masayoshi Son is a great business leader who has made a good reputation of the institution across the globe. These huge investment amounts have reasons behind them and they are not always for profits.
Softbank has invested around $200 million in the Mubadala’s fund. This comes after Mubadala made sure that they invest $15 billion in the Japanese bank’s investment firm. Saudi Based Abu Dhabi’s state investor Mubadala Investment Co is about to invest around $400 million in the European startups.
In recent times, we have seen that many of the major companies around the world invest in smaller companies. We can take a case study to understand these actions.
Alibaba is the largest e-commerce player in the world. It has a huge kitty and it is large enough to invest in most startups across the globe. India is one of the hottest startup markets in the world and its growing success is attracting investors from all over. India is also one of the largest e-commerce markets. Alibaba could have easily started their business directly in India but they went with the option of investing in the Indian startups and checking the waters before coming.
Paytm is the largest online payment platform of the country and Alibaba is their largest investor. They even insisted Paytm to start their own e-commerce platform called Paytm Mall, which is similar to Alibaba’s Taobao Mall in China. Their strategy of ‘wait and watch’ was a good one as the new FDI and e-commerce policy of the Indian government is not in their favour.
So in the above case, Alibaba learned well about the Indian market, government regulations and public perception and demands by investing in local startups.
Softbank is one of the largest players in the Indian startup ecosystem who has made huge investments. Their investments are over $1 billion each year. They have also invested around $31 billion in the UK based ARM that manufactures chips for the smartphones.
Softbank’s investment in Mubadala’s European tech firms will be a learning experience for the bank and it will help the startups there as well.