By Anshia Dutta
SoftBank Group Corporation is a Japanese multinational telecommunications and internet business based in Tokyo. Established on 3rd September, 198. It operates broadband services, fixed-line telecommunications, e-commerce and finance, semiconductor technologies and many other businesses. Since its incorporation, SoftBank has grown immensely and is one of the top hundred companies with the highest market capitalisation in the world. Today its founder, Masayoshi Son, is one of Japan’s most influential CEOs.
SoftBank’s international investments
Since 1995, when SoftBank bought COMDEX from The Interface Group, it has been developing a strong portfolio of international investments. Although SoftBank sold COMDEX to Key3Media in 2000, in the same year it made an investment of $20 million in Alibaba, then a fledgeling Chinese internet venture. In 2006 the company became the owner of the Fukuoka SoftBank Hawks, a Japanese professional baseball team, and in April of that year, it bought a 23% stake in Betfair, an internet betting exchange. In 2010 SoftBank went on to acquire 13.7% in Upstream, and in October 2012 it announced its takeover of competitor eAccess. SoftBank’s acquisition of the Sprint Corporation was approved by the US Federal Communications Commission in July 2013 and it went on to acquire a 51% stake in Supercell in October of that year
However, SoftBank’s biggest investments have been its most recent. In June 2015, it announced an investment of $1 billion in the Korean e-commerce website DramaFever. In March 2016 the company announced that it was buying Vodafone Japan and on the 5th of September 2016, the company completed its largest-ever acquisition, of British chip designer ARM Holdings, for more than $32 billion.
SoftBank continues to dominate the Indian market
SoftBank’s domination of the Indian market started in the year 2014. In October the company invested $210 million in OlaCabs, India’s most popular cab-hailing app, and a whopping $627 million in Snapdeal. In a fresh round of funding in October 2017, SoftBank made a further investment of $2 billion in Ola. For the past couple of months, negotiations have been taking place between Ola’s largest competitor, Uber, and SoftBank for a potential $10 billion investment. Uber said in a statement, “We believe this agreement is a strong vote of confidence in Uber’s long-term potential. Upon closing, it will help fuel our investments in technology and our continued expansion at home and abroad, while strengthening our corporate governance.”
On 18th May, SoftBank completed its single largest investment in India to date by investing $1.4 billion in Paytm. Masayoshi Son described the move as part of a larger interest in the Indian market. “In line with the Indian government’s vision to promote digital inclusion, we are committed to transforming the lives of hundreds of millions of Indian consumers and merchants by providing them digital access to a broad array of financial services, including mobile payments. We are excited to partner with Paytm on this journey and will provide them with all our support.”
The investment in Paytm was made in the wake of demonetisation, that had taken place the previous year and which had increased the user base for online payment systems. The move was also seen as a counter to Amazon, which launched its own payment entity, Amazon Pay, earlier in 2017. Paytm plans to invest about $1.6 million in the next few years in the hope of doubling its user base, while SoftBank has also invested $2.5 billion in Flipkart. Analysts see this as a strategy not only to put down significant stakes in India’s largest internet companies but also to take Amazon head-on in the world’s fastest-growing digital economy.
Underlying strength despite losses
In its annual report for the fiscal year ending March 2017, SoftBank reported a valuation loss of $1.4 billion and had written off $475 million in its two flagship investments—Ola and Snapdeal. However, unfazed by these losses, SoftBank sees itself as a long-term investor in India. It has so far invested close to $6 billion in the country and looks set to invest more in the years to come. Its investments in the Indian market have given it a dominating position despite the recent losses.
Featured Image Source: Flickr
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