SoftBank's Grand Exit, Fully Pulls Out of Policybazaar Parent, Rakes in $650 Million Returns
SoftBank's Mega Move, Bidding Adieu to Policybazaar and Zomato in Strategic Exit
18 January 2024
SoftBank completes its strategic exit from PB Fintech, parent company of Policybazaar, aligning with a 12-month strategy of gradually diluting holdings in listed Indian startups through public market deals.
SoftBank invested $200 million in PB Fintech in June 2018 and concluded the exit with a final stake sale in mid-December, totaling approximately Rs 914 crore ($109 million) and yielding returns of $650 million, with profits around $450 million.
The exit trend includes Zomato, marking SoftBank's deliberate strategy to dilute holdings in Indian startups, collectively generating $1.8-1.9 billion through public offerings in 2021 and 2022. The complete exit prompts questions about potential ripple effects and new capital-seeking opportunities in India's dynamic startup ecosystem.
In a significant move, Japanese technology investor SoftBank has completed its exit from PB Fintech, the parent company of renowned insurance marketplace Policybazaar. This strategic divestment is part of SoftBank's overarching strategy over the past 12 months, gradually diluting its holdings in various listed Indian startups through public market deals.
SoftBank's journey with PB Fintech began in June 2018 when it invested close to $200 million from its Vision Fund. The exit process unfolded in phases, with the final stake sale in mid-December, amounting to about Rs 914 crore ($109 million), completing the divestment puzzle. Overall, SoftBank has realized returns of approximately $650 million, making profits of about $450 million from its investment in the Gurugram-based insurance aggregator.
The divestment trend extends beyond Policybazaar, as SoftBank also made a notable exit from Zomato in December 2023, selling a 1.08% stake in the food delivery company. This aligns with Masayoshi Son-led SoftBank's deliberate strategy of diluting its holdings in various Indian startups, including successful exits from Paytm, Zomato, PB Fintech, and Delhivery, which collectively raised $1.8-1.9 billion through public offerings in 2021 and 2022.
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As of September 30, 2023, SoftBank held a 4.39% stake in PB Fintech. Mutual funds and major investors like Tencent and Steadview Capital held significant stakes, while founders Alok Bansal and Yashish Dahiya retained their shares. Moreover, SoftBank's portfolio companies, including FirstCry, Ola Electric, and Swiggy, are expected to go public this year, with FirstCry and Ola Electric already filing draft IPO papers in December 2023.
SoftBank's influence on India's startup ecosystem is undeniable, having funded almost a fifth of the country's unicorns, amounting to a staggering $15 billion investment. The SoftBank Vision Fund alone contributed $11 billion, with the remaining $4 billion strategically invested in renewable energy and infrastructure sectors.
The complete exit of SoftBank from Policybazaar and Zomato raises questions about potential ripple effects in the startup landscape. Will other foreign investors follow suit, or will this open new avenues for capital-seeking opportunities in the dynamic Indian startup ecosystem? The unfolding scenario promises to shape the trajectory of India's startup landscape, and only time will reveal the answers to these intriguing questions.