SoftBank will continue to back Ola, Snapdeal, says top exec Alok Sama
Japanese telecom and internet major SoftBank Corp will strongly back its investee firms Ola and Snapdeal as they take on global goliaths Uber Technologies Inc and Amazon.com Inc in a battle for larger market share and supremacy, according to a top SoftBank executive.
Over the last two years, SoftBank has emerged as one of the largest investors in India's fast growing consumer internet space, deploying nearly $2 billion, of which about $1.3 billion has been invested in Ola, run by ANI Technologies Pvt. Ltd, and Snapdeal, run by Jasper Infotech Pvt. Ltd.
SoftBank Group remains committed to the $10 billion it has promised for India in the coming years, a report published by The Economic Times said, quoting Alok Sama, chief financial officer and president of SoftBank Group International.
"Over the last two years, we have invested $2 billion in India and as I scan our growth stage investment portfolio globally, that makes India our No 1 destination. India will remain a strategically important market for us. That won't change in the foreseeable future. In terms of plans, our first priority is to nurture our portfolio companies," Sama said in an interview with the newspaper.
Sama, co-founder of Dubai-headquartered investment management firm Baer Capital Partners, joined London-based SoftBank Group International, a subsidiary of the SoftBank Group, in August last year. VCCircle was the first to report his appointment.
Sama was picked by SoftBank's founder and CEO Masayoshi Son to fill Nikesh Arora's role to oversee global investments.
Arora, who was tipped to be the successor to Son, quit SoftBank in June after a group of investors alleged that Arora made imprudent investment decisions and that his stay with Japanese telecommunications and internet giant would amount to conflict of interest. Arora decided to move on even after a panel of independent SoftBank directors that reviewed the allegations gave him a clean chit.
Both cab-hailing app Ola and ecommerce major Snapdeal are reportedly in talks with investors for a fresh round of funding. Ola was reportedly in talks with SoftBank and General Motors to raise $500 million.
Ola had raised its Series F funding in November last year. It has raised $1.3 billion to date. The last round of funding came from Scottish investment firm Baillie Gifford and China's Didi Chuxing, besides some existing investors.
SoftBank's other major portfolio firm Snapdeal, which was founded in 2010, was reportedly in talks with Amazon and Flipkart for a possible merger. Snapdeal's bid to reach out to rivals was seen as a likely fallout of Arora's exit from SoftBank.
Arora had led SoftBank's investment in a clutch of Indian startups, including Snapdeal, and also reportedly invested himself in some of them. His sudden departure had triggered speculation about SoftBank's plans for India.
When SoftBank first invested $75 million in Snapdeal in 2013, it was the second-biggest player in ecommerce after Bengaluru-based Flipkart, in terms of sales. Now it is lagging behind Flipkart and Amazon's Indian subsidiary.
"We continue to talk to Kunal (Kunal Bahl, founder and chief executive of Snapdeal) regularly. Masa (Son) himself is directly focused on the situation. And we are cognizant about the need for capital. A number of initiatives are in the works that will make sure the company is well financed and supported as it faces competition," Sama said in the interview.
When asked about Ola's fight against US-based rival Uber in India, he said, "Third-party data show Ola is ahead of Uber on all key metrics." Ola is a formidable competitor, he said, adding, "We are 100% solidly behind Ola."
Sama also indicated that SoftBank is open to consolidation of its portfolio companies