Japanese conglomerate SoftBank Group today said it has recorded loss from investments to the tune of $ 1.4 billion, or over Rs 9,000 crore, for 2016-17 in Indian startups like Snapdeal and Ola.
SoftBank Group Corp (SBG) registered loss from financial instruments at FVTPL (fair value through profit or loss) of Japanese yen 160,419 million in consolidated financial statements for the fiscal year ended March 2017, SoftBank said in a statement.
The financial instruments at FVTPL include preferred shares of Jasper Infotech (Snapdeal) and ANI Technologies (Ola), it added.
SoftBank has also written off over USD 1 billion on valuation of its investment in Snapdeal.
“This (SBG’s loss at FVTPL) mainly resulted from recording a loss as the amount of changes in the fair value of the financial instruments at FVTPL from March 31, 2016 to March 31, 2017,” SoftBank said.
The Japanese firm has multi-billion investments in Indian firms, including Ola, Snapdeal and Elara Technologies, which owns PropTiger, Housing and Makaan.com.
“The valuation of our financial investments are frequently adjusted upwards or downwards due to accounting policies, currency fluctuations and market dynamics. The loss reported in today’s earnings represents the aggregate impact of such revaluations during the course of the entire fiscal year,” a SofBank spokesperson said.
The development comes at a time when SoftBank, one of the biggest investors in Indian start-ups, is trying to sell Snapdeal to bigger rival Flipkart for about $1 billion. On the other hand, Ola, which rivals Uber Technologies Inc, has managed to raise only about $350 million after hitting a fundraising trail in June last year, with SoftBank alone putting in about $250 million.
SoftBank is keen to sell Snapdeal to Flipkart in order to cut its losses on an investment that has not worked well. SoftBank picked Snapdeal over Flipkart and Paytm in 2014.
SoftBank entered the Indian consumer Internet segment with a bang in 2014, writing big cheques for Ola and real estate platform Housing.com. The firm has also invested in grocery delivery start-up Grofers. Overall, SoftBank has invested about $1 billion in Indian consumer Internet start-ups.
However, a significant chunk of such investments have shown little signs of recovery, prompting SoftBank to scout for mergers.
Housing.com was sold in an all-stock deal to rival PropTiger for about $70-75 million, valuing the combined entity at about $275 million, in January this year.
Online grocer BigBasket, run by Supermarket Grocery Services Pvt. Ltd, and Grofers have initiated talks for a merger that, if consummated, could also see SoftBank Group, an existing investor in the latter, participate in a $60-100 million funding round in the merged entity.
(With PTI inputs)