Mumbai: With the appointment of Sumer Juneja as its India head, SoftBank Investment Advisers has clearly indicated its intent of enhancing its India focus multifold. According to heads of several investment firms operating in India, Juneja’s appointment will help SoftBank make smarter bets, given his past experience and ready insights into firms the Japanese behemoth is keen to invest in.
As rumours are rife that SoftBank wants to back online food ordering and delivery startup Swiggy over its rival Zomato, Juneja’s association with Swiggy will come in handy. A former director of Norwest Venture Partners, he had first led its investment into the venture, now a unicorn, in June 2015.
Norwest had invested even as SoftBank was simultaneously in talks with Zomato. Juneja’s appointment is expected to tilt the scales towards Swiggy, where he has also served as a board member.
“This could be a precursor to an investment in Swiggy, which SoftBank has been evaluating anyway," said V.T. Bharadwaj, partner at A91, a new early-stage investor, and a former managing director at Sequoia Capital.
SoftBank has been evaluating Swiggy for nearly a year, but both parties had failed to reach an agreement during the start-up’s last two funding rounds, Mint reported in August.
According to Bharadwaj, an investor with deep pockets such as SoftBank will be able to back high-growth, high-cash burn businesses such as Swiggy more easily. “Swiggy will really need the SoftBank kind of money because it is burning cash at a rapid pace," said Bharadwaj. For the year ended 31 March, Swiggy’s revenue trebled to ₹ 468 crore, while its losses nearly doubled to ₹ 397 crore from the previous year.
The move to open an India office with Juneja at its helm is also in line with the Japanese firm’s road map of investing $10 billion within 10 years in India—a target it is most likely to reach.
According to an Economic Times report on 30 April, the firm has already invested $7 billion in the past four years. “We would definitely overachieve on our commitment much ahead of time and at a much bigger scale," Masayoshi Son, chief executive at SoftBank, was quoted as saying.
SoftBank is invested in some of the leading unicorns in India, including Paytm, Ola Cabs, Oyo Rooms and Policybazaar. Another $2 billion worth of deals are in the pipeline. As per media reports, SoftBank is in talks to invest in online beauty retailer Nykaa, baby products retailer FirstCry and Swiggy. It is also in the process of raising $100 billion for its second Vision Fund, and is likely to sign bigger cheques.
The investors Mint spoke to expect SoftBank to either invest a lump sum amount upfront, like it did in Oyo last month with an $800 million investment, or use a tranche-based investment approach.
“SoftBank will now look to make only big deals and double down. For a $100 billion fund, even if you make 10 times returns on a $50 million investment, it does not matter," said Anand Lunia, co-founder and partner at India Quotient, an early-stage venture capital fund. Lunia added that Juneja’s appointment also means SoftBank now wants more ears on the ground for its India operations, as it looks to make bets across the biggest and fastest growing Indian startups across sectors.
SoftBank declined to comment on its plans. Messages sent to Juneja did not elicit a response. Swiggy did not respond to calls and messages till press time.
As partner at Norwest, Juneja spearheaded investments in Cholamandalam Finance, Shriram City Union Finance Ltd, Thyrocare and Quikr.