SoftBank to pare more than two-thirds stake in InMobi, its first-ever India bet

SoftBank Group is set to reduce its stake in InMobi by more than two-thirds, said people with knowledge of the matter. InMobi was the Japanese investor’s first direct investment in India and the country's first unicorn.

One of India’s largest tech investors, SoftBank is reportedly selling upwards of 20% stake in InMobi for around $250 million, valuing the company at around a billion dollars, the people said, requesting anonymity. Post the deal, the Japanese investor’s stake in InMobi would fall below 10%, down from the current 33-35%, the sources said.

The deal will be part of a $350 million loan raised by InMobi from Varde Partners, Elham Credit Partners, and SeaTown Holdings, against the company’s founder, Naveen Tewari’s stake. The Economic Times had earlier in the day reported that the loan will be raised across two tranches—$200 million and $150 million—at InMobi’s operating and holding entities, and will be priced at 13-14%.

InMobi did not immediately respond to a query sent by YourStory. SoftBank declined to comment.

If completed, the deal would represent another liquidity event for SoftBank from an Indian company, boosting its returns portfolio. SoftBank’s track record in India has been mixed, with significant gains from PB Fintech and its formerly struggling Blinkit (Grofers) investment, but losses exceeding $500 million from Paytm. To be sure, the Paytm loss was also indirectly offset by SoftBank's stake sale in Japanese fintech firm PayPay, in which Paytm held a stake. These transactions were reported by CapTable last year.

With InMobi, SoftBank will recover nearly all the capital it deployed after the stake sale and retain under a 10% holding. But despite staying invested for 14 years—its longest India bet—the return won’t be significant. The Japanese investor had repeatedly written down the value of its InMobi stake as the company went through a turbulent stretch before recently stabilising. As a result, sources said, recouping its entire investment means SoftBank will avoid booking a loss on the deal.

“Naveen Tewari’s decision to raise a loan against his stock to repay early investors reflects his confidence in the business. InMobi has seen both highs and lows but appears to have steadied. SoftBank may realise gains if the company eventually lists,” a source said.

Over the past two years, SoftBank has been divesting stakes across its India portfolio either via public or private markets. Moreover, at least five of the companies in its India portfolio have gone public—Swiggy, Ola Electric, FirstCry, Lenskart, and Unicommerce. Through its Vision Fund arm, SoftBank has invested more than $10.6 billion over the past decade and has already monetised $11 billion through these stake sales.

InMobi, which became India’s first unicorn in 2011, is gearing up for an initial public offering (IPO) and will be starting the process for it by mid-next year, sources said.