SoftBank, a Japanese investment company, would lead the upcoming $100 million to $120 million fundraising round for FinTech Juspay. It is estimated the move would value the company at between $400 million and $500 million – and if the round of investments reaches its goal, Juspay will have raised the most money since it was founded almost a decade ago.
SoftBank was established in 1981 in Tokyo as a telecommunications firm. Today, it has a hand in a number of different areas, including e-commerce, finance, broadband, marketing, and more.
“SoftBank” literally means “a bank of software” in Japanese, as software is called “soft” in that language. They aim to become a key source of infrastructure for the information society, hence the word “bank.” The Group invests primarily in technology, energy, and financial companies. Its headquarters are in Minato, Tokyo, and it focuses on investment management.
As the COVID-19 pandemic unfolds, more businesses are shifting their focus online, so Juspay is adding more services to help them process payments. Over the past few months, FinTech has raised about $27 million from investors, including raking in $21.6 million in March 2020 at a valuation of $118 million.
With its plans to inject fresh capital into Juspay, SoftBank, one of the largest investors in Paytm, appears to be looking to diversify its investments in the Indian FinTech space. The company already has equity investment from Accel and Wellington Management.
The Economic Times reported that SoftBank may invest $50 million while other investors are still finalizing their plans. SoftBank owns 16 per cent of Paytm following a $1.6 billion investment. The investment in Juspay shows that SoftBank Vision Fund II is willing to invest in startups with smaller funding requirements.
Paytm’s parent company One97 struggled on its debut at the Bombay Stock Exchange last week, losing more than 25% on the first day of trading. In 2020, India’s GDP was $2.7 trillion and had grown by about 7% annually, according to One97’s initial filing, with growth poised to climb to 9% as the spread of the pandemic slows. One97 estimated that the volume of digital payments in the country would increase by about 30% over the next few years due to a multi-year shift away from cash.
SoftBank shares opened lower on Friday following reports that a new coronavirus variant has been spreading rapidly in parts of South Africa. According to Bloomberg, Didi’s losses escalated when the Cyberspace Administration of China (CAC) asked its top executives to devise a plan to delist it from the New York Stock Exchange, citing anonymous sources. According to Bloomberg, the country’s tech watchdog asked Didi’s management to delist the company from the United States because of “concerns about the leakage of sensitive data,” according to Bloomberg. According to the report, the company is looking at straight-up privatization or a Hong Kong share float followed by delisting from the US. But this is still a work in progress, and “it’s possible regulators would change their minds,” the report said.
China’s regulators investigated Didi on cybersecurity grounds and yanked it from app stores days after Didi’s blockbuster IPO. The CAC claimed that Didi had illegally collected and handled personal information. Didi is facing tough punishment as part of Beijing’s crackdown on private enterprises, particularly tech companies.
