SoftBank Group is in talks to invest $35 million in car repair and service company GoMechanic, in what would be one of the Japanese investor’s smallest bets in India through its Vision Fund, which typically signs larger checks, two sources told Reuters.
SoftBank has been a major funder of Indian startups for years, investing nearly $4 billion last year alone, according to data from Venture Intelligence. His significant investments include digital payment company Paytm and online education company Unacademy.
But investment industry executives say SoftBank has begun to take a more measured approach to its investments after a global tech rout. Last month, its boss Masayoshi Son said SoftBank would invest significantly less this year than in 2021, following a record $26.2 billion quarterly loss for its Vision Fund due to falling tech valuations. .
Vision Fund’s preliminary talks with GoMechanic are hovering around a $600-700m valuation, with Malaysian sovereign wealth fund Khazanah and existing investor Tiger Global also planning to invest in the $100m funding round , said the two sources familiar with the matter, who declined to be named because the talks are private.
GoMechanic and SoftBank declined to comment, while Khazanah and Tiger Global did not respond to requests for comment. Bloomberg News previously reported Khazanah’s interest in the funding round.
Founded in 2016, GoMechanic has serviced and repaired more than two million cars in India through its service centers, and claims it costs 40% less than automakers’ offerings.
SoftBank has been in talks with GoMechanic for more than nine months and was initially uncomfortable with the Indian company’s $1 billion valuation request, the first source said.
GoMechanic was valued at $300 million last year and currently has an annual gross revenue of around $40 million, the person added.
In May, two sources told Reuters that SoftBank’s son had started telling executives to invest smaller sums at earlier stages to save money. SoftBank’s second $40 billion Vision Fund is smaller than its first $100 billion vehicle, making it more conservative, they said.