After A Stormy 2016, Softbank Has Smartly But Cautiously Picked Up The Pieces In India

After lurching from one disaster to another in 2016, Japan’s Softbank is hitting all the right notes this year.

The misfit

“Sometimes it is not about capability, it is about the right fit. Nikesh Arora is a wonderful individual, understands the business really well, but he wasn’t a great fit at Softbank from a cultural perspective,” said Sanchit Vir Gogia, Chief Analyst, Founder and CEO of Greyhound.

Arora, he says, is a “true American venture capitalist who is aggressive and makes more risky bets,” while Japanese investors traditionally don’t venture into high-risk businesses.

Slow and steady

The company’s recent investments show that, in line with its global approach, the company is going after Indian startups that are winners in their categories, like Paytm and Flipkart. “That’s where Softbank has hit the nail on the head,” Gogia believes.

“The Flipkart investment isn’t an investment in isolation…I think Softbank is playing its cards really well,” Gogia said. It is bringing a balance to its investments by backing later-stage startups. While this move may appear too late, “if you take a little longish view on it, say a five-year horizon, you’ll see the merits (in these investments),” Gogia said.

However, there’s a lot more Softbank still needs to work on. A stronger board in India would be a good starting point, Gogia said. It would also be important for the company, as for its peers, to look at exit strategies and making money on its investments.

[Source]

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Analyst:

Sanchit Vir Gogia: Sanchit is the Chief Analyst, Founder & CEO of Greyhound Knowledge Group, a Global Strategy & Transformation Research, Advisory & Consulting Firm. To read more about him, click here.


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