Swiggy, FirstCry add $160m to SoftBank portfolio value

Swiggy and FirstCry led SoftBank’s Vision Fund portfolio gains in India for the April–June quarter, contributing nearly US$160 million in unrealized investment value.

Swiggy’s fair value rose by US$139 million as its stock increased 21%, while FirstCry added US$20 million after a 5% share price rise, based on SoftBank’s latest earnings presentation.

As of June, SoftBank valued its stakes in Swiggy and FirstCry at about US$800 million and US$500 million, respectively.

In the previous quarter, Swiggy’s stock dropped almost 40%, resulting in a notional loss of US$424 million, while FirstCry’s stock fell 43%, though SoftBank did not disclose the extent of that markdown.

Ola Electric, another Indian portfolio company, saw its stock drop over 22% in the June quarter, leading to a notional loss of around US$300 million.

🔗 Source: YourStory

🧠 Food for thought

1️⃣ SoftBank’s strategic pivot reveals the challenges of growth-stage investing in volatile markets

The dramatic swings in Swiggy and FirstCry valuations demonstrate the inherent volatility that has affected SoftBank’s Vision Fund strategy.

Swiggy alone caused a $424 million notional loss for SoftBank in March, then generated $139 million in gains just one quarter later, highlighting how paper valuations can shift dramatically in public markets.

This volatility pattern extends across SoftBank’s broader portfolio, with Vision Fund 2 reporting a cumulative loss of $3.4 billion primarily due to markdowns in investments like Swiggy and Ola 1.

The Vision Funds have reported a cumulative investment loss of $475 million, raising concerns about inflated valuations in growth-stage investments 2.

These fluctuations help explain why SoftBank hasn’t signed new deals in India since 2022, instead focusing on realizing returns through upcoming IPOs of portfolio companies like Lenskart and Meesho.

2️⃣ SoftBank’s shift toward AI-integrated acquisitions signals a fundamental strategy change

SoftBank’s exploration of BPO buyouts represents a marked departure from its traditional growth-stage investment approach toward operational AI integration.

The company is now targeting acquisitions of Indian IT and BPO firms to integrate AI into their services, moving away from its previous strategy of funding high-growth startups 3.