When we look back at the journey of Indian startups from their ideation stage to unicorn stage, there are many external and internal factors that pushed them to become what they are today. At any given point, a company needs money to sustain and continue its operations. In this regard, when we observe and understand the external factors that shaped up the top Indian startups, we will end up with some big names. There are multiple VC firms and investors who gave that support to Indian startups when no one trusted the vision. They poured in billions of dollars into the Indian startup ecosystem, and as a result, what we are witnessing is their bold bet.
One man named Masayoshi Son stood out and backed Indian startups with more than $10 billion over the period with his Softbank Vision Funds. When Masayoshi Son launched the $100 billion SoftBank Vision Fund in 2017, he described it as a vehicle to fuel the “information revolution.” Since 2017, he has backed many startups and committed nearly $16 billion. This journey is so insightful because he had made blockbuster returns and lost millions with some investments, and yet again, they are ready to back more Indian startups. But what does this story really tell us? Beyond headlines of gains and losses, SoftBank’s India experiment offers deeper insights into how capital, timing, and governance interact in emerging markets.
Masayoshi Son entered India with his Vision Fund 1, which was launched in 2017. It was the largest tech investment vehicle at that time. The vision of the fund is to create and target category leaders, write them big checks, and push them towards expansion. The earliest investment was Flipkart, wherein they poured about $2.5 billion, and in no time, they got billions in profits as Flipkart was acquired by Walmart. Then during the same period, they invested in Paytm, Ola, Oyo, and Policy Bazaar. But not every startup investment is successful. Paytm is something that eroded millions of their investment. Softbank has invested around $1.6 billion, and they exited with a loss of approximately $500 million. Whereas the remaining companies have contributed to make profits, but the loss they got with Paytm made it offset.
One major thing that we need to notice is that in the initial investments, such as Flipkart, they got an exit in the form of acquisition, so they made hefty profits. But when it comes to Paytm, it got an exit after the listing, which is subjected to market reactions. Paytm got listed with higher valuations and so much hype prior to listing, but within no time the market reacted negatively, and it lost more than 50% of its market value. Here Softbank is one of the biggest loss makers; they lost close to $500 million.
After the highs and lows of Vision Fund 1, Masayoshi Son didn’t step back. Instead, he doubled down on his belief that India would create the next wave of global tech giants. In 2019, SoftBank launched the Vision Fund 2 (SVF2), this time with a corpus much lower than the first fund. The biggest difference between the two funds lies in their capital structure: • Vision Fund 1 was powered largely by external sovereign wealth funds and investors like Saudi Arabia’s Public Investment Fund and Abu Dhabi’s Mubadala. That meant SoftBank had to balance its vision with the expectations of these investors. • Vision Fund 2, however, was funded primarily by SoftBank itself, giving Masayoshi Son greater freedom to make bets without external pressure. But it also meant SoftBank carried more risk directly on its balance sheet.
Then with the launch of its new fund, they now invested more aggressively in Indian startups. Instead of writing multi-billion-dollar checks to a few giants (like it did with Flipkart or Paytm), it began backing a wider range of growth-stage startups with relatively smaller ticket sizes. The focus was on emerging sectors like SaaS, edtech, logistics, and B2B platforms, categories that could define India’s next phase of digital growth. Some of the notable Indian startups backed by Vision Fund 2 include: Meesho received an investment of over $570 million from Softbank Vision Fund 2. Ola Electric received the funding, and then one of the notable investments is in OfBusiness. OfBusiness is planning for an IPO and is also one of the most profitable unicorns. Lenskart: India’s eyewear giant, where SoftBank has been one of the largest backers. FirstCry and Zeta also raised millions from Softbank Vision Fund 2.
The contrasting journeys of the two funds highlight an important evolution: Vision Fund 1 chased category leaders with aggressive checks, often inflating valuations and fueling hypergrowth. Vision Fund 2 is more measured and diversified, targeting startups with stronger fundamentals and clearer paths to profitability. Now if it is clear, let’s look at the numbers. The firm has netted over $5.5 billion in exits, led by massive gains from Flipkart, Delhivery, PolicyBazaar, and Zomato. But this journey has also faced some troubles with Notable losses include a $544 million hit from Paytm. More recently, Vision Fund 2 saw a $708 million loss in Q4 FY25, largely due to declining valuations in Swiggy and Ola Electric. Despite all these ups and downs, Softbank’s vision funds have turned net positive because of the strong exits and recent IPO-led valuation gains.
After years of aggressive investing, SoftBank pulled back from Indian startups during 2022 and early 2023. The global “funding winter” left many companies focused on preserving cash, and SoftBank entered a near-18-month pause in new deals while assessing its portfolio. In mid-2024, SoftBank officially resumed investing in Indian startups, signaling its renewed interest in the country’s growth story. Sumer Juneja, SoftBank’s head of India and EMEA, stated that the investor was now actively pursuing deals, particularly at the growth stage, and reiterating its readiness to write meaningful checks (typically $50M+).
So, by observing all of this, it clearly shows Masayoshi and Softbank trust the Indian startup ecosystem. And despite these funding winters and heavy losses, the fund hasn’t stopped investing. It clearly signals that investors want to back the Indian startup ecosystem; it’s just that if we have a great product and proper market fit with innovation, funding will never be a problem to scale and build a billion-dollar business. And one of the major lessons that we need to learn from this is that, though he faced troubles and lost support from major firms, Masayoshi didn’t give up on his vision; he took a pause and recalibrated and made a strong comeback with his new investments that are shaping the world.
And in conclusion, SoftBank’s renewed interest signals that global capital still sees India as one of the most promising startup hubs. But the approach will be different this time, as they are not just chasing growth at any cost but focusing on profitability, governance, and sustainable business models.
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