Indian startups in tension due to soft bank losses, know what is the reason

Indian startups have raised $5.8 billion in March and April this year. This amount is 15 percent less than the same period last year, SoftBank has already indicated to reduce investment

SoftBank loss, startup tension

The days of startups already facing crisis are about to get worse. SoftBank, which funds most Indian startups, has given up. Obviously, seeing SoftBank, now more investors will also shy away from investing in startups. Now they know why this happened. Actually, Japanese IT company SoftBank Group was confident that Indian startups would do well. But the opposite happened. In this, SoftBank got the biggest blow from Paytm. Actually, SoftBank is the biggest investor in Paytm. SoftBank holds 17.4 per cent stake in Paytm and around 12.4 per cent in PolicyBazaar. Now let’s talk about the losses incurred by SoftBank.

SoftBank heavy losses

SoftBank Group has incurred a loss of $23.4 billion. SoftBank had to bear this loss in the April-June quarter of the current financial year 2022-23. In such a situation, now startups are being funded. In such a situation, the situation of startups can go from bad to worse. Once again the biggest crisis has arisen on jobs. Startups providing jobs on big packages can cut more jobs. However, the story of this loss of SoftBank had started a few months back. It was a few days ago. SoftBank CEO Masayoshi Son has said that this year his fund will invest only one-fourth of the money in startups compared to last year. The reason is SoftBank’s record loss of $ 13 billion in 2021-22.

Startup funding decreased

SoftBank Group’s investments have fallen in value amid concerns over inflation and interest rates, causing it to suffer heavy losses. At the same time, Indian startups have raised $ 5.8 billion in March and April this year. This amount is 15 percent less than the same period last year. Tech startups in India had raised $35 billion in 2021 as new funds. The issues of corporate governance in these startups have also scared everyone.

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SoftBank Corporation is one of Japan’s largest telecommunications and Internet companies, providing its services in the areas of broadband, fixed line telecom, e-commerce, finance, media and marketing. The market capitalization of this company is $92 billion. Softbank has already invested $10 billion in Indian startups.