One of the Japanese investor’s smallest bets in India by its Vision Fund, which generally signs bigger checks, is in talks to spend $35 million in the car servicing and repair company GoMechanic, according to two sources who spoke to Reuters.
According to data from Venture Intelligence, SoftBank has long been a big investor in Indian businesses, having made close to $4 billion in one year alone. The online education company Unacademy and the digital payments company Paytm are among its high-profile investments.
However, according to officials in the investment sector, SoftBank has begun to approach its investments with more caution following a worldwide tech downturn. Following a record $26.2 billion quarterly loss at its Vision Fund due to declining tech valuations, SoftBank’s CEO Masayoshi Son stated last month that the company would invest significantly less this year than in 2021.
Early-stage discussions between Vision Fund and GoMechanic are being held at a valuation of $600-700 million, according to two sources with knowledge of the situation who asked to remain anonymous because the discussions are private. Malaysian sovereign fund Khazanah and current investor Tiger Global also intend to invest in the $100 million funding round.
GoMechanic was established in 2016 and claims to be 40% less expensive than the services offered by manufacturers. The company has serviced and repaired more than two million cars in India through its service locations.
According to the first source, SoftBank has been in talks with GoMechanic for more than nine months and was initially uneasy with the Indian company’s desire for a $1 billion value.
According to the source, GoMechanic was valued at $300 million last year and today generates about $40 million in gross annual sales.
Two sources told Reuters in May that SoftBank’s Son had begun directing executives to make smaller investments earlier on in order to save money. They claimed that because SoftBank’s second Vision Fund, which has a $40 billion cap, is lower than its original $100 billion vehicle, it is more cautious.
