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The $ 100 billion Softbank Vision Fund (SVF) chose not to invest in the new tech arm of Mukesh Ambani Jio Platforms and retail Reliance Retail because it did not believe the two companies would meet its expectations. SVF CEO Rajeev Misra told Business Today.
The two entities, owned by Reliance Industries, raised billions earlier this year from global heavyweights such as Facebook, Google, Intel, Qualcomm and General Atlantic, among others. When asked, Misra regretted not having the Reliance companies in his portfolio, he replied, “How can I regret that we decided not to participate?”
Jio Platforms, which uses new technologies such as cloud, media, digital commerce, financial services, games, education, health, agriculture, e-governance and smart cities, has raised more than $ 20 billion (1.52 trillion rupees) from 13 investors this year.
A large number of Jio Platforms investors were also spending in Reliance Retail, which has so far raised Rs47,264 crore.
Softbank’s decision to pull out of Reliance companies comes at a time when the investor faces criticism for the poor performance of some of their most important holding companies such as Oyo, which has been criticized for its disastrous downfall. due to unsustainable business models and expansion plans, a toxic work culture and low customer return on its properties
Recently, Softbank has reportedly taken a more cautious approach to its Indian investments, focusing on experienced second-generation entrepreneurs. And the investment body is becoming more and more reserved.
“Why have we only deployed $ 3 billion in SVF II in the past 7 months? We used to make a single investment of $ 10 billion, ”Misra said. “It’s not that we don’t see all the investments. We are the biggest technology investor. Everyone wants us as an investor because of other advantages. We all see them.
It also keeps more of an eye on existing holding companies. Softbank’s November 2019 investment in Paytm was reportedly given a five-year deadline for the fintech company’s IPO.
Additionally, Misra himself, along with three other inside directors, left the Softbank Group board this week to make way for outside members who might have better corporate governance.
In addition, the Vision Fund has gained a reputation for supporting startups rather than conglomerates. Reliance subsidiaries might not need the kind of integrated SVF offerings, Misra suggested.
After all, Reliance’s national and global aspirations have already begun. In May, rumors were circulating that Jio Platforms would be listed overseas. Last month, Qualcomm and Jio Platforms tested 5G solutions. Reliance Retail, meanwhile, already operates nearly 12,000 stores in 7,000 Indian cities and is one of the 200 largest retail chains in the world.
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