PROFITABILITY OVER PASSION
Land of Opportunity: Yesterday’s Term Sheet included a link to this story about SoftBank’s ambitions in India that deserves a little more attention. Like so many articles about tech in India, this one draws comparisons between India’s current surge in entrepreneurship and the very recent one in China, which minted massive returns for SoftBank via Alibaba.
Investors in India really want it to be “the new China,” even though they know Chinese companies had huge regulatory advantages over Western competition that Indian companies do not have. (Alibaba never had to compete with Amazon, WeChat never had to compete with Facebook, Didi beat Uber. Yesterday Warren Buffett bemoaned India’s regulatory hurdles as a hindrance for Western company growth there.) From Reuters:
“[SoftBank founder Masayoshi] Son is thinking India is the place where he will create one or two Alibabas,” said one of the sources familiar with SoftBank ambitions, adding Son sees the country right now as the “land of golden opportunity.”
Ironic, considering that Son’s Indian successor-to-be, Nikesh Arora, caught some criticism from investors for spending too much time and money on “imprudent” Indian deals and was eventually pushed out of the company. (Also worth noting: SoftBank deals are usually outlandish by design.)
To win in India, Son appears to be playing the role of matchmaker, striking deals and mashing portfolio companies together to create scale. As previously reported, SoftBank is attempting to merge portfolio company Snapdeal with competitor Flipkart. The company is also investing $1 billion into Paytm, which could eventually merge into Flipkart, according to yesterday’s report. Meanwhile, SoftBank wants to merge on-demand grocery startup portfolio company Grofers and its competitor, BigBasket.
Between India, Sprint rumors, surprise buyouts like ARM Holdings, the $100 billion Vision Fund, and Pepper the robot (plus, the