SoftBank’s Vision Fund is largely similar to all other VC funds

SoftBank made a whopping $1.5 billion in profit from exiting Flipkart, but it makes for a hollow victory at best and a vague defeat at worst in the larger scheme of things

In August 2017, SoftBank had invested $2.5 billion into Flipkart through a combination of primary and secondary purchases

Now, the company is said to have sold the entire stake to Walmart for $4 billion

But SoftBank probably made this decision more out of compulsion rather than of free choice

A $4-billion exit for a $2.5-billion investment would be the VC equivalent of scoring two runs off a ball in cricket, rather than a sixer. Why do it then?

What is cooler than a billion dollars?

Well, for one thing, $1.5 billion. Rs 10,000 crore if you like your numbers well-rounded.

In profit.

If you are an investor in India, a return of this size would take you right off the VC sweepstakes in terms of absolute dollars earned.

It is a lot cooler if you make this enormous sum in just one year.

This is exactly what SoftBank achieved with Flipkart. In August 2017, it had invested $2.5 billion into Flipkart through a combination of primary and secondary purchases.

AUTHOR

Sumanth Raghavendra

Sumanth is a serial entrepreneur with more than eighteen years experience in running startups. He is currently the founder of Deck App Technologies, a Bangalore-based startup attempting to re-imagine productivity software for the Post-PC era. Sumanth’s columns appear regularly in leading publications. He holds MBA degrees from the Indian Institute of Management, Bangalore and Thunderbird, The American Graduate School of International Management, USA.

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