After deploying $2 billion worth of funds in India in two years, SoftBank Corp.’s chairman Masayoshi Son continues to remain bullish on India’s start-up ecosystem and is determined to further invest in the country’s internet economy.
In India to attend the Hindustan Times Leadership Summit and meet with portfolio companies, Son said he remains bullish about cab aggregator Ola and will continue to back the company.
Son spoke of the potential of India’s digital revolution, investment opportunities he sees in solar energy and electric vehicle in the country. Edited excerpts from an interview:
You have indicated that you could exceed the $10 billion commitment in India. Where all can we see this investment flow into?
I see a lot of opportunity in Internet-related start-ups. And second is the solar business. We are going to start building a solar plant that will be up and running and generating power by spring next year. We are on track for that.
I am also interested in supporting electric vehicles in India—four wheels.
Are you looking at some specific companies?
We have investment in Ola and so Ola is currently providing regular cars to their drivers but if we can support more to reduce the pollution and improve the environment… that is a good thing.
This is just the beginning of thinking… More specifics are yet to be decided but that is a new area that I am interested in.
You can expect Ola’s fleet to be partly electric vehicles and these will be locally made since I support Make in India. This is what I said at my meeting with the prime minister today.
Will this be in partnership with manufacturers?
Whoever that can provide as a partner to this programme… providing electric vehicle to Ola’s drivers. I am interested in supporting them.
This is not something we can work alone on. We need to work with government, we need infrastructure of charging stations and all kind of accelerating programmes. It is a good thing for the society and it will be a joint effort with manufacturer, government—local and central.
What kind of numbers are we speaking here?
Big numbers… I don’t do anything small. Could be bigger than 100,000. I think this will be the biggest initiative for electric vehicles in India.
Would this also require investment by you in a manufacturer as well?
I don’t know yet. I just want Ola to be contributing to the Indian society and not just by providing transportation to customers… but also to Indian society with much less pollution.
If electric vehicles can be provided more to those professional cab drivers, I think it is a good thing. The government has announced that their vision for year 2030 is to have all new vehicles to be electric vehicles. I would like to contribute by showing example of the initiative.
This is my wish, not a commitment yet. My wish is to provide something like 1 million electric vehicles to Ola drivers.
Over the next 5-10 years?
I hope it is sooner. So that is the kind of problem I am interested in supporting. Providing skilled jobs to the new young people or the ex-army people, whoever wish to have a job we will provide a skilled training opportunity and those people who do not have initial money to own a car, I wish to provide it for free.
You mean free and not subsidized?
You can think of many different ways but at least zero money you need… if you are working hard and as long as you keep working… I am willing to support them. This is only for new Ola-trained drivers.
As long as a guy works hard, he should be able to own the car eventually and be able to drive a nice car… a brand new car and environmental friendly. I have some idea that could work if people work together.
I just want to show the example on how electric vehicles can be accelerated to be deployed in this country… that is a wish I have.
You continue to back Ola at a time when there are hardly any new investors supporting the firm. How long are you willing to support them?
I am going to support Ola!
What is the endgame for Ola? Do you see them going for an IPO or do you see an exit by sale?
It will be a successful company… it is too early to talk about IPO. Ola is needed… it is sort of public transportation. But India has too much pollution, congestion and people are suffering. I think this kind of thing is good for society. So electric vehicle is something I would like to initiate. So we have to talk to whoever is interested in supporting the programme.
Have you spoken to any of the manufacturers yet?
No, not yet. But the technology already exists.
Until two years ago, your vision for Snapdeal was that it could be the Alibaba of India. The company today has become a distant No. 3 in the e-commerce sector. Has your view changed there?
I am seeing them tomorrow. I will hear more on them.
Will you continue to support Snapdeal as well?
I hope so.
Can we see some synergies between Alibaba and SoftBank firms in India—Paytm and Snapdeal?
I don’t know enough about those. I just have to listen and study and I have to think all kind of efforts to support.
At one point you did look at Paytm for potential investments. Do you regret missing to invest there?
I have a lot of respect for them. It is still early stage of the industry so anything can be possible. We already have investments in Paytm via Alibaba investment.
Do you expect some consolidation given the common investors?
I came to India a year ago so I have to study more about the environment. I have to hear and then I will think about it.
You have spent about two years working with Indian entrepreneurs. What according to you are their strengths and weaknesses?
India market is very big opportunity going ahead… this is still early stage. We are very much interested in supporting the good entrepreneurs. I think we have a lot of good entrepreneurs and I would like to support them in many ways.
You have had a mixed stint in India so far, some investments have turned out pretty well—like Ola, which is the market leader—while there are others that have not worked well for you. Will there be a change in your strategy in your investment strategy going forward?
The opportunity is huge in India. So I will continue to invest and I will look at many different angles. I will continue to enhance solar power generation. Internet is also a huge opportunity that I see and with the mobile infrastructure improving every day with 4G LTE… it becomes a good environment for many internet start-up companies to evolve to much bigger scale, much bigger opportunity. So I am very much excited to continue to support and I am very bullish on them.
We haven’t seen too many new investments in the last one year in the Internet space from SoftBank. Are there are any new avenues within the sector that you are looking at?
I would see more entrepreneurs. I will continue to meet with the existing portfolio leaders and we will look for new opportunity continuously.
Are you meeting new entrepreneurs during this trip?
This time, we don’t have a specific programme like last time. But when I briefly met with my portfolio company leaders, I told them to recommend entrepreneurs and start-ups for us to consider investment. They can come and introduce and I will be interested in investing.
What is your vision about exits in India now, given that there have been concerns about the start-up ecosystem and valuations?What is your return profile likely to be and the timeline for it?
I am not looking at short-term exits. I am not a short-term player. Even in the case of Alibaba, we waited 15 years. So I am not concerned about short term, and I am only concerned about long term. And as far as I see nothing has changed… there is a bright future, big opportunity and this is still early days. In the beginning of Internet in China there were ups and downs, but I never doubted the big opportunity ahead in China and here I have double confidence because the market is big.
There are good times and bad times but SoftBank is always there.
Out of $8 billion remaining to invest in the country, how much money have you set aside for follow-on investments and how much would you be willing to invest in new ventures?
That is too much detail… we have just announced that we have started to invest another $100 billion. So it is just a matter of where, to whom and that is the only model. I am also determined about investing in India, the only matter is who will be the recipient of that.
May be I should say that a little softly, so that other investors don’t see more opportunity here.
How are things at SoftBank after Nikesh Arora’s departure? Would you say it was an amicable departure?
I miss Nikesh, he is one of the smartest people I have met and one of the most talented persons. I wish he was still at SoftBank but as you can see I am still not retiring and I am still enjoying my work. So to have Nikesh wait for next 10 years is something I feel sorry and he is too talented to wait for as a No. 2 person.
When I recruited him I thought I would be retiring much earlier because I did not want to be a bottleneck. I thought that Nikesh could be my successor very early but I realized that I was not going to be retiring as this is too much fun. Now I am back into my commitment of staying as the CEO for most likely next 10 years. This is the way I continue to operate