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<ul class="summary-list"><li>SoftBank reported a $7.7 billion quarterly profit on Tuesday after a loss last year.</li><li>Gains in its tech bets come as it prepares to invest further in AI and eyes future IPOs.</li></ul><a target="_blank" class="" href="https://www.businessinsider.com/masayoshi-son-softbank-gambling-man-lionel-barber-technology-2024-9">SoftBank's</a> bets on AI and timely public listings have helped it post its biggest profits for two years, a year after posting losses in the billions.The Japanese technology conglomerate swung to a 1.18 trillion yen ($7.7 billion) profit on Tuesday. For the same period last year it reported a 931.1 billion yen ($6 billion) loss. Masayoshi Son's company — once associated with its notorious <a target="_blank" class="" href="https://www.businessinsider.com/weworks-nightmare-ipo">failed bet on WeWork</a> and other lossmaking startups — pointed to gains made across its Vision Funds, its huge investment vehicles with both public and private holdings in tech companies.Gains for its Vision Fund 1, a $98.6 billion investment vehicle launched in 2016 with backing from Abu Dhabi and Saudi Arabia's sovereign wealth funds, totaled $3 billion in the second quarter. It reported strong performances in listed companies in its portfolio, such as Didi Chuxing, a Chinese version of Uber.Navneet Govil, chief financial officer at <a target="_blank" class="" href="https://www.businessinsider.com/inside-softbank-vision-funds-awful-year-former-employees-rival-vcs-2022-12">SoftBank's Vision Funds</a>, told Business Insider that "macro tailwinds" such as US interest rate cuts and stimulus measures in China helped its public portfolio.Vision Fund 2, which made a $500 million investment in OpenAI last month, made a $900 million investment gain in the quarter due to growth in privately held portfolio companies such as Revolut.The UK-based fintech giant, which has won banking licenses in the UK and Mexico in recent months, is now valued at $45 billion. SoftBank invested in Revolt in 2021, when it was worth $33 billion.<h2 id="18d37cf2-1aaf-4020-8453-aa9f8c4b8cca">Tailwinds for IPO activity </h2>Listings in India of companies like Ola Electric have also provided a boost for SoftBank.Govil said SoftBank saw opportunities to realize future gains from IPOs after a period of stagnancy, adding that "rate cuts in the US and elsewhere are constructive developments because they effectively lower the cost of capital and provide a good tailwind for IPO activity."He continued: "We have a late-stage portfolio that's now valued at about $34 billion and some really high-quality companies which are leaders in their respected industries, from ByteDance to PayPay to Fanatics. They will all list when the time is right."Despite the investment gain, Vision Fund 2 has lost an overall total of $21 billion since its inception. The fund has been forced to grapple with a tougher interest rate environment in recent years and a slow <a target="_blank" class="" href="https://markets.businessinsider.com/news/stocks/recent-upcoming-ipo-processes-stock-market-impact-outlook-reddit-astera-2024-4">IPO market.</a>The results come as SoftBank gears up for a huge investment spree in AI to realize Son's ambitious vision. Last month at SoftBank World — its annual customer event — the founder and CEO said he <a target="_blank" class="" href="https://group.softbank/en/event/earnings_2024q2?utm_source=pressmail&amp;utm_medium=email&amp;utm_campaign=press1112#webcast02">hoped to achieve "artificial superintelligence"</a> within a decade.The 67-year-old Son, who made his original fortune with a timely bet on Alibaba, is hoping to create outsize returns in the generative AI era. He has already bet on buzzy companies such as Perplexity and chip firms trying to rival Nvidia, such as Graphcore and Arm.

SoftBank is betting on AI and an IPO revival after swinging to a $7.7 billion profit

<ul class="summary-list"><li>SoftBank looks set to get a slice of OpenAI.</li><li>Reports suggest the Japanese conglomerate will invest $500 million into the ChatGPT maker.</li></ul>If everything goes to plan, OpenAI will end the week as a $150 billion giant at the center of the AI industry. It will also end the week with another reputation: a new piece in the grand puzzle being solved by <a target="_blank" class="" href="https://www.businessinsider.com/masayoshi-son-softbank-gambling-man-lionel-barber-technology-2024-9">Masayoshi Son.</a>The billionaire founder of Japanese conglomerate SoftBank looks set to add Sam Altman's startup to his sprawling portfolio following reports that his company will <a target="_blank" href="https://affiliate.insider.com?h=6174e992fbcba77742faa597fc56a9d63cf9c5a128b9fc27f6eee13e7a42ce5b&amp;postID=66fd5577e5b540830041020e&amp;postSlug=openai-softbank-investment-ai-vision-2024-10&amp;site=bi&amp;u=https%3A%2F%2Fwww.theinformation.com%2Farticles%2Fsoftbank-to-invest-500-million-in-openai%3Foffer%3Drtsu-engagement-24%26utm_campaign%3DRTSU%253A%2BSoftBank%2Bto%2BIn%26utm_content%3D5445%26utm_medium%3Demail%26utm_source%3Dcio%26utm_term%3D3703">make a massive $500 million bet</a> on the ChatGPT maker.The funding, part of a $6.5 billion investment round, which Bloomberg reported on Wednesday <a target="_blank" class="" href="https://www.bloomberg.com/news/articles/2024-10-02/openai-has-closed-new-funding-round-raising-over-6-5-billion">had closed</a>, will cap a new era for Sam Altman's company. It follows a tumultuous few months in which a string of <a target="_blank" class="" href="https://www.businessinsider.com/openai-execs-mira-murati-leaving-restructuring-for-profit-sam-altman-2024-9">high-profile departures</a> has brought its status as Silicon Valley's hottest AI startup into question.But for its new expected backer from Tokyo, the funding is about something much bigger.Son, a technology evangelist who has made and lost billions of dollars since founding SoftBank as a software distribution business in 1981, talked up the advancement of AI as his life's mission long before ChatGPT arrived in late 2022. He doubled down on this sentiment at his company's annual meeting in June, telling shareholders that <a target="_blank" href="https://group.softbank/en/ir/investors/shareholders/2024">"this is what I was born to do."</a>So, while a $500 million bet will give SoftBank a stake in one of Silicon Valley's buzziest companies, it is worth considering how it fits into the AI picture of tech's widest-eyed visionary.<h2 id="cd880916-0653-4073-a89e-09b9bd7bb3d3">Masayoshi Son's AI vision is ambitious</h2><div type="image" title="OpenAI CEO Sam Altman." height="2392" width="3600" msid="113883429" hostid="261" sizebytes="163328"></div>To understand<a target="_blank" class="" href="https://www.businessinsider.com/softbank-masayoshi-son-jack-ma-bet-ai-2024-2"> Son's grand AI ambitions</a>, it's worth first zooming out to see how SoftBank currently maps out AI investment opportunities.In a presentation to investors this year, seen by Business Insider, SoftBank divided its interests in AI into three distinct layers. First, there's the application layer involving "the consumer 'super apps' used every day," like <a target="_blank" class="" href="https://www.businessinsider.com/everything-you-need-to-know-about-chat-gpt-2023-1">ChatGPT</a>. Then, there's the infrastructure layer, which is all about tools to gather and analyze data. Finally, there's a hardware layer, which includes chips, data centers, and robotics.In OpenAI, SoftBank looks like it'll finally have a major investment in a foundation model AI company — a company building the large language models sitting behind consumer-facing apps like ChatGPT and <a target="_blank" class="" href="https://www.businessinsider.com/pharma-cio-cancelled-microsoft-copilot-ai-tool-2024-7">Microsoft Copilot</a>. Think of it as floating somewhere between layers one and two.SoftBank has made a previous effort to get ahead with investments in the first two layers through its first <a target="_blank" class="" href="https://www.businessinsider.com/inside-softbank-vision-funds-awful-year-former-employees-rival-vcs-2022-12">Vision Fund, a $100 billion investment vehicle launched in 2016</a> with backing from Middle Eastern sovereign wealth funds, and its second Vision Fund launched in 2019.The second fund, set to back OpenAI, invested in <a target="_blank" class="" href="https://www.businessinsider.com/perplexity-ai-forbes-wired-explained-2024-6">AI search engine startup Perplexity</a> at a $3 billion valuation in June. Judging by Son's previous comments, the hundreds of companies backed by the funds will eventually find a way to complement one another. That hasn't gone completely to plan.Performance across the funds has wavered. As of June, Vision Fund 1's gains were $21.7 billion, while Vision Fund 2 losses totaled $22.9 billion. Most of the investments also came before the generative AI boom that started after ChatGPT's launch, meaning billions of dollars of investment has gone to companies not exactly tailored to the tech of the moment.So it's become clear that Son's focus has fallen on the other part of his AI investment stack.In September 2023, Son took a big step forward in the hardware layer by successfully relisting Arm. The chip designer, which SoftBank bought for $32 billion in 2016, has positioned itself as a key player in the AI space, helping it reach a market capitalization of over $142 billion.<div type="image" title="Arm Holdings CEO Rene Haas" height="683" width="1024" msid="113883430" hostid="261" sizebytes="46262"></div>It explains in part why, in February, a report emerged suggesting Son had been busy courting investors in the Middle East to raise up to $100 billion for a venture that would help him go even bigger on chips.<a target="_blank" class="" href="https://www.bloomberg.com/news/articles/2024-06-21/softbank-s-son-aims-to-create-super-ai-in-new-investment-drive">According to Bloomberg</a>, the SoftBank founder has codenamed the secretive project Izanagi — the deity of creation in Japanese mythology. He reportedly picked that name, in part, because it contains the initials for artificial general intelligence, or AGI, a form of AI that could rival human intelligence or even surpass it.What such a chip venture would look like is unclear. Son could look to compete on chip design by building a venture to rival Nvidia, the $2.9 trillion chip giant that his company lost huge gains on after dumping its near 5% stake back in 2019. The venture could also support plans for Arm, which SoftBank retains a 90% stake in, to get into its own AI-specialized chip venture in 2025, per <a target="_blank" class="" href="https://asia.nikkei.com/Business/Technology/SoftBank-s-Arm-plans-to-launch-AI-chips-in-2025">Nikkei</a>.In July, the company acquired <a target="_blank" class="" href="https://www.businessinsider.com/graphcore-posts-bigger-losses-2022-and-needs-cash-2023-10">Nvidia rival Graphcore</a> in a deal that the startup's CEO Nigel Toon said would make it "part of the delivery behind a very grand vision."Alternatively, he could be looking at getting into the manufacturing and data center arena. A report from <a target="_blank" class="" href="https://www.wsj.com/tech/ai/sam-altman-seeks-trillions-of-dollars-to-reshape-business-of-chips-and-ai-89ab3db0">The Wall Street Journal in February</a> suggested OpenAI's Altman had met with Son and others to discuss ambitious plans to build new chip manufacturing plants, data centers, and more to support AI's advancement.Of course, like OpenAI, Son's ultimate ambition in AI is to realize <a target="_blank" class="" href="https://www.businessinsider.com/artificial-general-intelligence-development-andrew-ng-openai-microsoft-meta-google-2024-9">AGI</a>.In a new book on Son, former Financial Times editor and author Lionel Barber recalls a two-hour conversation he had with the SoftBank founder in late 2023 at the company's Tokyo headquarters. According to Barber, Son said he'd like to be remembered as "one of the foundation stones of AGI.""I may not be the full story of AGI, but one of the foundation stones of AGI," Son is reported to have said. "AGI is the only thing I care about."But while OpenAI races to build models that might <a target="_blank" class="" href="https://www.businessinsider.com/openai-o1-ai-model-agi-2024-9">inch humanity closer to AGI</a>, it's clear that Son wants to get his hands on all the pieces needed to help it achieve that goal.

OpenAI is just one piece of the puzzle in SoftBank's grand vision for AI

<ul class="summary-list"><li>SoftBank-backed glassmaker <keyword id="21250775" type="General" weightage="20" keywordseo="View" source="keywords" meta.keywordsubtype="org" meta.entityname="View" meta.hostid="261" meta.entityid="View">View</keyword> filed for <keyword id="19903649" type="General" weightage="20" keywordseo="bankruptcy" source="keywords">bankruptcy</keyword> in April, 3 years after its SPAC.</li><li><keyword id="23006643" type="General" weightage="100" keywordseo="CEO-Rao-Mulpuri" source="keywords">CEO Rao Mulpuri</keyword> has stepped down from View which was taken private by two <keyword id="19900618" type="General" weightage="20" keywordseo="investors" source="keywords">investors</keyword>.</li></ul>Five months after glassmaker View <a target="_blank" href="https://www.businessinsider.com/softbank-backed-view-files-bankruptcy-spac-struggles-2024-4">filed for bankruptcy</a>, CEO Rao Mulpuri has stepped down. Under his tenure, View raised $1.1 billion from <keyword id="19944037" type="General" weightage="20" keywordseo="SoftBank" source="keywords" meta.keywordsubtype="org" meta.entityname="SoftBank" meta.hostid="261" meta.entityid="SoftBank">SoftBank</keyword> in 2018 and went public in 2021. It struggled as a public company and <a target="_blank" href="https://www.businessinsider.com/view-inc-rao-mulpuri-spac-smart-glass-2022-6">ran low on cash</a> several times before declaring bankruptcy in April. Mulpuri announced his departure on Thursday night in a memo to employees which he also posted on <a target="_blank" href="https://www.linkedin.com/feed/update/urn:li:activity:7235077660702294016/">LinkedIn</a>. "After 15 incredible years, I have decided it's time to leave View Inc. What a ride it has been! A journey of a lifetime, filled with many ups and downs, but never a dull moment," he wrote. View makes eco-friendly windows that darken when it's sunny, reducing energy costs for air conditioning. The Milpitas, California-based firm filed for Chapter 11 bankruptcy to reorganize without liquidating all its assets. Two of View's longtime investors Cantor Fitzgerald and real estate firm RXR have taken the company private. Cantor sponsored the special purpose acquisition company that merged with View to take it public, raising $815 million. On August 22, the financial-services firm agreed to a $12 million settlement to end a lawsuit by SPAC investors who alleged they were misled. Cantor did not reply to a request for comment in time for publication. According to a separate memo sent to employees Friday morning, two board members will run View as co-CEOs: Joshua Spellman, chief of staff at Cantor, and Andrew Min, a senior vice president at RXR. Mulpuri has led View since 2008, replacing one of the firm's cofounders. Previously he led Japanese semiconductor manufacturer Novellus Systems. He is known for his magic touch with investors, managing to raise cash for View multiple times when funds ran low, including from the now-bankrupt financier Greensill Capital. "He's always been able to pull a rabbit out of a hat when it comes to procuring more money for the company," one banker familiar with View previously told Business Insider. In 2022, BI spoke with 29 former and current <a target="_blank" href="https://www.businessinsider.com/softbank-view-inc-rao-mulpuri-spac-investigation-2022-6?r=VIEWinc-teaser&amp;utm_medium=referral&amp;utm_source=yahoo.com">View employees</a>. They described a culture of micromanagement and said they were afraid of being fired. Mulpuri obsessively monitored tweets and LinkedIn posts about View and asked people to write positive reviews of the company on Glassdoor, multiple former employees said. Two former employees in the corporate office said View staff called him "Chairman Rao," an inside joke rhyming his name with the Chinese communist leader Mao Zedong. "If you didn't agree with the company's potential or the rosy picture, or how we were going to revolutionize and change the world, you were kept on the outside," one of the employees said. Mulpuri did not comment in time for publication. In his note, he hinted that he will return to the startup industry. He would be "back in the saddle" building things "sooner than later," he wrote. "Stay tuned..." Correction: August 30, 2024 — An earlier version of this story misdescribed one of View's investors. Cantor Fitzgerald is a financial-services firm, not a law firm.

View CEO Rao Mulpuri, who saw the glassmaker go from investor darling to declaring bankruptcy, has resigned

<ul class="summary-list"><li>News Corp. has accused AI startup Perplexity of copyright infringement in a new lawsuit.</li><li>Perplexity is eyeing a massive funding round this year, <a target="_blank" href="https://www.wsj.com/tech/ai/ai-startup-perplexity-in-funding-talks-to-more-than-double-valuation-to-8-billion-54d36787?mod=article_inline">The Wall Street Journal had reported</a>.</li></ul>Perplexity, the hot AI startup aiming to compete with Google that has earned the ire of several prominent media organizations, is eyeing a massive funding round — which could mark its fourth raise this year.The AI-fueled search engine is in talks to raise $500 million at an $8 billion valuation, <a target="_blank" href="https://www.wsj.com/tech/ai/ai-startup-perplexity-in-funding-talks-to-more-than-double-valuation-to-8-billion-54d36787">The Wall Street Journal reported on Sunday</a>, a big jump from the company's $3 billion valuation this summer.Perplexity has been raising buckets of cash while it <a target="_blank" class="" href="https://www.businessinsider.com/perplexity-ai-forbes-wired-explained-2024-6">clashes with top publications</a>, which have accused the company of improperly accessing and using their content.On Monday, the Journal and New York Post filed a lawsuit against the company, becoming the <a target="_blank" class="" href="https://www.documentcloud.org/documents/25244804-news-corp-vs-perplexity?responsive=1&amp;title=1">latest to level accusations against Perplexity</a> and highlighting the ongoing tensions as media companies grapple with AI's ascent.Perplexity did not immediately respond to a request for comment from Business Insider.Here's everything you need to know about the company's rise and the allegations it's facing.<h2 id="7d8d5158-6833-4037-a9c1-2f89e8f3d37d">Big-name investors</h2>Perplexity was cofounded in 2022 by Aravind Srinivas, Denis Yarats, Johnny Ho, and Andy Konwinski. Srinivas — a former research scientist at OpenAI — <a target="_blank" href="https://www.businessinsider.com/perplexity-ceo-advice-startup-founders-2024-6">serves as its chief executive</a>.Perplexity is an AI-fueled search engine that monetizes by selling subscriptions; it will soon start selling ads, according to The Journal. The company has annualized revenue of $50 million, according to The Journal, and fields 15 million searches every day.Perplexity has attracted the backing of <a target="_blank" href="https://www.wsj.com/tech/ai/jeff-bezos-bets-on-a-google-challenger-using-ai-to-try-to-upend-internet-search-0859bda6">tech mogul Jeff Bezos</a> as well as multitrillion-dollar chip firm Nvidia.In January, the company raised roughly $74 million at a $520 million valuation; by its next funding round in the spring, the company was valued at $1 billion and later valued at $3 billion after SoftBank's Vision Fund 2 invested.<h2 id="1bef7e0c-8ab9-4b5d-a281-cd01043e47b1">Allegations of 'ripping off' news outlets</h2>Perplexity has clashed in recent months with a <a target="_blank" href="https://www.businessinsider.com/perplexity-ai-forbes-wired-explained-2024-6">number of media organizations</a>, including Forbes and Wired.In June, Forbes' executive editor <a target="_blank" class="" href="https://x.com/JohnPaczkowski/status/1799135156051255799">accused Perplexity</a> of "ripping off" an investigation without proper attribution. Srinivas <a target="_blank" class="" href="https://x.com/AravSrinivas/status/1799159732126794017">said</a> he agreed the sourcing should've been more prominent.That same month, Wired made similar claims in an <a target="_blank" class="" href="https://www.wired.com/story/perplexity-is-a-bullshit-machine/">investigation</a> that found Perplexity summarized certain articles inaccurately and without attribution. It also alleged Perplexity was likely scraping content that websites had intended to be off limits.Perplexity pushed back in a statement to the outlet, though Wired reported that it didn't deny the allegations."The questions from WIRED reflect a deep and fundamental misunderstanding of how Perplexity and the internet work," Srinivas told Wired.<h2 id="037c51ec-2645-47c9-8696-257c1e980b10">Legal trouble from The New York Times and News Corp.</h2>Perplexity has more recently found itself in the legal crosshairs of The New York Times and News Corp.Last week, the Times — which <a target="_blank" class="" href="https://www.businessinsider.com/nyt-sues-open-ai-microsoft-alleging-trained-chatgpt-off-content-2023-12">previously sued OpenAI and Microsoft</a> — sent Perplexity a cease-and-desist letter demanding it stop using Times content in its results, <a target="_blank" class="" href="https://www.reuters.com/technology/artificial-intelligence/nyt-sends-ai-startup-perplexity-cease-desist-notice-over-content-use-wsj-reports-2024-10-15/?utm_source=reddit.com">Reuters reported</a>.The Times alleged that Perplexity was violating copyright laws by using its content to create news summaries, according to Reuters.In a statement to Reuters, Srinivas said: "We are very much interested in working with every single publisher, including The New York Times. We have no interest in being anyone's antagonist here."On Monday, the Journal and New York Post owner News Corp. filed a lawsuit against Perplexity, also alleging copyright infringement."This suit is brought by news publishers who seek redress for Perplexity's brazen scheme to compete for readers while simultaneously freeriding on the valuable content the publishers produce," the lawsuit states.The lawsuit alleges Perplexity built its user base "through theft of a massive volume of copyrighted material" and threatened a "reckoning" for the company in court.While Perplexity has dealt with criticism from media outlets, its rival OpenAI has struck deals with publishers to use their content.In May, OpenAI announced a <a target="_blank" class="" href="https://openai.com/index/news-corp-and-openai-sign-landmark-multi-year-global-partnership/">multi-year deal</a> with News Corp. to give the AI firm access to content from the conglomerate's media properties. That deal came months after OpenAI and Axel Springer <a target="_blank" rel=" nofollow" href="https://www.axelspringer.com/en/ax-press-release/axel-springer-and-openai-partner-to-deepen-beneficial-use-of-ai-in-journalism">unveiled</a> a multi-year content licensing deal that gives ChatGPT access to select content from Axel Springer publications — including Politico, Business Insider, and European properties like BILD and WELT.

What to know about Perplexity, the buzzy — and controversial — AI startup targeting a big funding round

<ul class="summary-list"><li>Creator-economy startup Jellysmack is reorganizing and cutting some staff.</li><li>The startup, backed by SoftBank, has faced business challenges after raising significant funding.</li></ul>Jellysmack, a prominent creator-economy startup backed by SoftBank, is undergoing a reorganization and cutting staff.The company confirmed to Business Insider that the latest cuts will impact 22 staffers in the US, and in the coming months, French employees will also be affected.Going forward, Jellysmack said it would prioritize its content business where it owns the intellectual property, including YouTube channels like Gamology, House of Bounce, Beauty Studio, and Oh My Goal. The company said it's scaling back on a program where it helped creators make money by posting their content on Meta-owned apps like Facebook."Jellysmack is making organizational adjustments to better align resources with key areas of growth," a representative told BI in an email. "Jellysmack's goal is to prioritize and invest in our business units that hold IP, given their continued success on YouTube. While we are scaling back certain operations in our Creator Program on Meta due to the opacity of their new monetization model, we remain dedicated to supporting our key creator partners and ensuring they continue to benefit from our platform."During <a target="_blank" class="" href="https://www.businessinsider.com/creator-startup-jellysmack-lays-off-staffers-restructures-memo-2024-1">a December round of layoffs</a>, Jellysmack's CEO said the company had experienced "a contraction of monetization across platforms."Jellysmack, which launched in 2016, transitioned from making its own YouTube content to working with other creators — such as superstars like MrBeast and PewDiePie — to edit and recirculate their content across platforms like Facebook and Snapchat in order to capture additional ad revenue."We realized that creators were not really leveraging their library of content and their brand, outside of YouTube, for monetization," Jellysmack cofounder Michael Philippe told BI in 2020.But Jellysmack expanded well beyond that in the past several years, launching arms ranging from a production play (JellySmash Productions) to an AI assistant (Jelly X). The company said in early 2022 that it would <a target="_blank" rel="" href="https://www.businessinsider.com/creator-startup-jellysmack-spend-500-million-on-old-youtube-videos-2022-1">set aside $500 million</a> for a program called <a target="_blank" rel="" href="https://www.businessinsider.com/jellysmack-jellyfi-dov-marmor-creator-finance-beyond-catalog-licensing-2022-8">JellyFi to license creator catalogs</a>. This division was <a target="_blank" class="" href="https://www.businessinsider.com/creator-startup-jellysmack-sold-catalog-licensing-business-jellyfi-2024-5">sold to Copyright Capital</a> at the beginning of 2024."They've almost shifted to being this holding company," a former staffer told BI earlier this year. The ex-staffer requested anonymity as they were not permitted to speak about their experiences working with the company.Despite Jellysmack's expansion into new areas of the creator economy, its business had been increasingly troubled, insiders told BI earlier this year. A <a target="_blank" class="" href="https://www.businessinsider.com/how-creator-economy-startup-jellysmack-lost-its-way-2024-5">BI investigation in May detailed the challenges the tech unicorn had faced</a> — and its uncertain path forward — after it raised a 9-figure war chest and became one of the creator economy's most high-profile companies.Jellysmack's move to prioritize and invest in business units that focus on intellectual property suggests a narrowing of its focus moving forward.

Jellysmack is laying off staff as it scales back its creator program

<ul class="summary-list"><li>SoftBank CEO Masayoshi Son's bet on AI seems to be paying off.</li><li>The Japanese conglomerate posted a $1.5 billion profit in its latest quarter.</li></ul><a target="_blank" href="https://www.businessinsider.com/softbank-ceo-masayoshi-son-crisis-tears-for-days-ai-2023-6">Masayoshi Son</a> once branded those dismissive of artificial intelligence as <a target="_blank" href="https://www.businessinsider.com/softbank-ceo-masayoshi-son-on-ai-doubters-being-left-behind-2023-10">a bunch of "goldfish."</a> Stuck in a bowl, they'd watch as the world around them finds new freedoms thanks to the technology.It's a bold view; but it's one that's starting to look like reality for the Japanese billionaire.<a target="_blank" href="https://www.businessinsider.com/softbank-masayoshi-son-ai-investor-presentation-2023-6">SoftBank</a>, the Tokyo conglomerate Son founded during Japan's boom years in the early 1980s, signaled that its all-in bet on AI was starting to pay off after posting its latest earnings on Monday.Despite an annual net loss of about $1.46 billion, the company posted a profit of about $1.48 billion for the first three months of 2024, capitalizing on profit momentum generated in the previous quarter.A key driver of SoftBank's gains over successive quarters has come from its stake in Arm Holdings.The UK chip firm, which SoftBank acquired in 2016 for $32 billion, has seen its stock price <a target="_blank" href="https://www.businessinsider.com/arm-ipo-ai-boom-chipmaker-softbank-2023-9">soar</a> since its September IPO as investors buy in to its fresh focus on AI.Arm, whose chip design is used by companies such as <a target="_blank" href="https://www.businessinsider.com/apple-siri-generative-ai-improvements-iphone-report-2024-5">Apple</a>, is looking to deploy its tech with AI companies, particularly those that service the highly intensive computing needs of generative-AI operators.<div type="image" title="Arm Holdings CEO Rene Haas" height="3458" width="5186" msid="111691665" hostid="261" sizebytes="387960"></div>SoftBank has benefited from this because it has a 90% stake in Arm, which has doubled in value to over $110 billion since the listing."Arm is central to our AI shift," Yoshimitsu Goto, SoftBank's executive corporate officer of finance, said on Monday. Soft Bank's net-asset value jumped 45% from its last quarter to $178.3 billion — driven by Arm's soaring share price.For Son, the profits could offer reassurance that he's on the right track with AI after years of hit-and-miss investments in other technologies through startup betting.Arguably the biggest investment flop for Son came from his <a target="_blank" href="https://www.businessinsider.com/softbanks-losses-on-wework-total-15-billion-2023-11">backing of WeWork</a>, the real-estate startup that filed for bankruptcy in November after once being valued at $47 billion.SoftBank has also had mixed success with a duo of venture-capital funds run out of London called <a target="_blank" href="https://www.businessinsider.com/inside-softbank-vision-funds-awful-year-former-employees-rival-vcs-2022-12">Vision Funds</a>, which have sprayed cash at startups globally since 2017. Some of the funds' bets, such as those on pizza-robot and dog-walking startups, have since imploded.Son's critics have questioned whether the billionaire could ever replicate the success he enjoyed from a $20 million investment in Alibaba in 1999 that's <a target="_blank" href="https://www.businessinsider.com/softbank-masayoshi-son-jack-ma-bet-ai-2024-2">made him $72 billion</a>.But as the appetite for Arm's AI activities shows, SoftBank has room to grow in the face of this latest boom. Son seems aware of this, with the company selling down several Vision Fund investments in recent months to plow fresh cash into AI opportunities.There are still risks, however, as AI euphoria since ChatGPT's introduction in November 2022 has sent the stocks of <a target="_blank" href="https://www.businessinsider.com/nvidia-impact-q1-earnings-season-ai-nvda-stock-price-capex-2024-5">companies like Nvidia</a> to dizzying heights, leaving investors to wonder if a downturn might be around the corner.With about $40 billion in cash on hand at the end of March, Son should be ready to step up his search for AI's next big thing. If he's able to make the right bets, AI could pay off handsomely for him in the long term.

Looks like Masayoshi Son's plan to go all in on AI is starting to pay off for SoftBank

<ul class="summary-list"><li>Nvidia's startup investments jumped 280% year-over-year, S&amp;P Global reported.</li><li>While its venture activity jumped, other tech giants largely pulled back investing.</li></ul><a href="https://markets.businessinsider.com/stocks/nvda-stock">Nvidia's</a> blowout performance last year has helped cement the firm as a rising star in corporate venturing, with the chipmaker's startup investments having nearly tripled in 2023, <a href="https://www.spglobal.com/marketintelligence/en/news-insights/latest-news-headlines/nvidia-rides-ai-wave-to-ramp-up-ventures-investments-80161338" target="_blank" rel="noopener">S&amp;P Global reported</a> on Tuesday.Specifically, Nvidia's annual year-on-year investing has ballooned 280%, the agency calculated. That's in stark contrast to a broad retreat amid other tech giants, as leading firms such as <a href="https://markets.businessinsider.com/stocks/msft-stock">Microsoft</a>, <a href="https://markets.businessinsider.com/stocks/googl-stock">Alphabet</a>, and <a href="https://markets.businessinsider.com/stocks/meta-stock">Meta</a> curbed their startup activity. In fact, the Facebook parent company suspended venture initiatives altogether in 2023. Pullbacks also extend to other firms that are historically leaders in corporate venturing, such as SoftBank Group and Tencent Holdings. Only IBM and Amazon expanded investments, which grew 100% and 13% year-on-year.Nvidia's participation in 38 funding rounds also made the semiconductor juggernaut the fourth-biggest corporate venture investor of the year. Ahead of it stand Microsoft, Softbank, and Alphabet.The firm tunneled $872 million in non-affiliated firms in the first nine months, according to its third-quarter report. The total value of rounds surpasses $5 billion, S&amp;P Global cited. Its rise in the space has been facilitated by the company's stellar stock and revenue outperformance in 2023. Nvidia's shares jumped roughly 225% through the year, as its chips have become an <a href="https://markets.businessinsider.com/news/stocks/nvidia-stock-price-value-ai-investing-tech-rally-bernstein-amd-2024-1">integral component of emerging artificial intelligence technology</a>.Within just two quarters, the company nearly tripled its revenues, hitting $18.1 billion for the year in the <a href="https://markets.businessinsider.com/news/stocks/nvidia-stock-price-third-quarter-earnings-revenue-ai-artificial-intelligence-2023-11">company's last earnings report</a>. Investors are betting that <a href="https://markets.businessinsider.com/stocks/nvda-stock">Nvidia's product roadmap</a> and more AI frenzy will only continue to boost growth.With so much capital, this has allowed Nvidia to unleash its cash pile on smaller companies. The firm's 2022 termination of a deal to <a href="https://markets.businessinsider.com/news/stocks/nvidia-stock-price-acquire-arm-softbank-agree-semiconductor-billion-tech-2020-9-1029586175">acquire Arm Holdings</a> suggests that bigger M&amp;A deals are off the table, S&amp;P Global said.The firm is largely interested in emerging technologies that propel it deeper into the AI space. Last year, it invested into 11 firms that deal with AI infrastructure, while also focusing on generative AI developers. Healthcare was also a bigger investing theme, with Nvidia focused on firms that apply AI in the sector.For 2024, the chipmaker doesn't seem to be slowing down; its already announced three startup investments, S&amp;P Global said.

Nvidia's investment in startups has nearly tripled as other tech heavyweights pull back

<ul class="summary-list"><li>Arm stock made its trading debut on Thursday following its IPO that valued the company at $54.5 billion.</li><li>It's the biggest US IPO since 2021, during a pandemic boom that saw massive valuations. </li></ul>Shares of <a href="https://markets.businessinsider.com/news/stocks/arm-shares-start-trading-biggest-ipo-almost-two-years">Arm</a> made their much-anticipated trading debut on Thursday, marking the biggest US initial public offering of the year, and largest since 2021. The stock climbed as much as 21% higher, to $61.66, shortly after trading commenced around noon ET. Shares had been priced at $51, at the top of the expected $47-to-$51 range. The Softbank-backed tech company, which designs most of world's smartphone chips, notched a $54.5 billion valuation after raising about $4.9 billion. Some strategists have pointed to the splashy launch as a potential turning point for the broader IPO market, but others aren't say the blockbuster debut isn't an accurate gauge for the typical company looking to go public. Arm, as well as the impending IPO of Instacart, <a href="https://markets.businessinsider.com/news/stocks/arm-ipo-instacart-market-dot-com-bubble-investors-finance-stocks-2023-9">may not be enough to revive a market that's still trying to shake off a pandemic hangover</a>.Today, the market is indeed open to new issuance but companies have to come to terms with far lower valuations, according to Craig Coben, former global head of equity capital markets at Bank of America. Private valuations were extreme during the pandemic—a period of historically cheap debt and ample liquidity—and now investors and startups have to stomach marking down investments. "When you have a down round via IPO, you may have to compensate people," Coben told Insider. "It creates all sorts of complications on the cap table for companies, your employees, early investors are underwater. Who's going to take it on the chin?"In any case, when a stock debuts on public markets, it's fueled by hype and complicated by technical and exogenous factors, Coben explained. No matter how the shares move, the perceived success or failure of Arm won't be known on its first day of trading. A longer time horizon — "12 months, not 12 minutes," as Coben put it — will determine whether the company earned a fair, accurate valuation. As for whether Arm's deal signals a thawing of the market for new IPOs, Coben says investors are receptive to new listings but it's nothing like the heady days of the pandemic era. "I think the market is extremely open," Coben said. "Investors have risk appetite, but it's not nearly to the same extremes as what we saw during the tech boom of 2020, 2021. Constructive but rational."

SoftBank-backed chipmaker Arm surges 21% in its trading debut after blockbuster $55 billion IPO

Beleaguered Japanese investment firm SoftBank has reportedly written off about $100 million it invested as part of its Vision Fund 2 in now <keyword id="15519454" type="General" weightage="20" keywordseo="bankrupt-crypto-exchange" source="Orion">bankrupt crypto exchange</keyword> <keyword id="2966084" type="General" weightage="20" keywordseo="ftx" source="Orion">FTX</keyword>. According to MarketWatch, the investment is now marked down to zero with SoftBank saying "it would not face a material markdown in the value of its stake". SoftBank had backed FTX after the startup raised $400 million in January, valuing it at $32 billion. SoftBank has now disclosed a $100 million venture capital investment in crypto broker FTX. Softbank CFO Yoshimitsu Goto was quoted as saying that $100 billion Vision Fund invested in FTX "as a minor stake in the company". "If any case of markdown but still that is very not material for us," Goto said during the company's second quarter (Q2) results. SoftBank has a history of pouring money in bad startups, like the $18.5 billion investment in WeWork. The Japanese VC firm also infused $500 million into digital mortgage lender better.com which laid off thousands of employees under its Indian-origin Co-founder and CEO Vishal Garg. Crypto exchange FTX has admitted that "unauthorised transactions" have drained hundreds of millions of dollars from its wallets, saying the company has moved many digital assets to a new "cold wallet custodian". FTX, which last week filed for bankruptcy in the US, did not reveal how much it lost in unauthorised transactions but reports claimed the amount could be as high as $600 million. SEE ALSO: <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/finance/news/retail-inflation-eases-to-6-7-in-october-from-7-4-in-september/articleshow/95512476.cms">Retail inflation eases to a 3-month low of 6.7% in October</a> <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/stock-market/news/markets-settle-lower-in-volatile-trade/articleshow/95508841.cms">Markets settle lower in volatile trade</a>

SoftBank writes off about $100 million invested in bankrupt crypto exchange FTX

<ul class="summary-list"><li>Former SoftBank exec Marcelo Claure and entrepreneur Paul Judge are raising a new $200 million fund.</li><li>The two bought SoftBank's diversity fund last year after incubating it at the Japanese company. </li></ul>Former SoftBank executive <a target="_blank" href="https://www.businessinsider.com/the-fabulous-life-of-self-made-mogul-softbanks-marcelo-claure-2019-10#in-1995-he-figured-out-another-loophole-to-turn-into-a-business-this-time-with-mobile-phones-4">Marcelo Claure</a> and serial entrepreneur and <a target="_blank" href="https://www.businessinsider.com/paul-judge-launches-300-million-fund-to-elevate-diverse-founders-2021-2">investor Paul Judge</a> are in the throes of raising a new $200 million fund.The duo were deep in investing calls when they took a break to catch up with Business Insider. It's been about a month since the Open Opportunity Fund announced that <a target="_blank" href="https://www.prnewswire.com/news-releases/marcelo-claure-to-co-lead-and-co-own-open-opportunity-fund-in-partnership-with-paul-judge-302018746.html">Claure was rejoining the fund</a> — one he was instrumental in launching over three years ago while he was at SoftBank.The past year has been transitional for the fund since Claure and Judge bought the $100 million fund from <a target="_blank" href="https://www.businessinsider.com/inside-softbank-vision-funds-awful-year-former-employees-rival-vcs-2022-12">SoftBank</a>. Other details about the deal were not disclosed.Since then, there haven't been any new investments, but the two are poised to capitalize on the success of the first fund and are raising the second Open Opportunity Fund.The <a target="_blank" href="https://www.businessinsider.com/softbank-100-million-opportunity-fund-companies-people-of-color-2020-6">first $100 million Opportunity Fund</a> — fully backed by SoftBank — invested in 75 startups and has had seven exits, including payments startup <a target="_blank" href="https://www.businessinsider.com/arcus-pitch-deck-fintech-startup-2019-7">Arcus</a>, which Mastercard bought in 2021, and <a target="_blank" href="https://www.businessinsider.com/drift-poached-salesforce-ai-exec-leo-tenenblat-chief-product-officer-2021-1">AI sales and marketing software startup Drift</a>, which Vista Equity Partners acquired, also in 2021. The fund, however, has not had any of its portfolio companies IPO, as that market <a target="_blank" href="https://www.businessinsider.com/the-dead-ipo-market-is-killing-vcs-ability-to-raise-new-funds-2023-7">continues to remain frozen</a>."I'm incredibly optimistic in terms of us being able to raise the money we set up because I've just had a few meetings, and they've all been incredibly positive," Claure, the fund's general partner and vice chairman, said.Judge, the fund's chairman, is a three-time startup founder who transitioned to venture investing with the incubator TechSquare Labs and <a target="_blank" href="https://www.businessinsider.com/paul-judge-launches-300-million-fund-to-elevate-diverse-founders-2021-2">Atlanta-based firm Panoramic Ventures</a>. He said that limited partners' interest has been positive overall since the Open Opportunity Fund's first fund has had so much success. Many of these LPs, including corporations, have a "dual mode" business mindset of wanting to do the right thing but also delivering meaningful capital returns, Judge added.Claure also said they received a "soft commitment" from SoftBank but now need to go out and close that investment. He also said he's contributing $20 million of his own cash to the new fund.Judge said that he expects the first Open Opportunity Fund to continue to deliver "top quartile" returns to its investors over the next five to seven years.For the first fund's portfolio companies, Claure and Judge said 75% of them have gone on to raise more funding. And the companies, on average, are growing revenue 100% on an annual basis and have at least two years of cash runway, Judge said.About 80% of the Open Opportunity Fund's portfolio comprises companies in the B2B SaaS space, including startups like Runway, a mobile app release management startup. Claure and Judge believe focusing on investing in software startups is one of the reasons they've seen so much success in such a short time.For this next fund, they want to replicate the same winning recipe with an eye toward backing companies in the fintech, <a target="_blank" href="https://www.businessinsider.com/list-top-healthcare-startups-investors-take-off-in-2024">healthtech</a>, and edtech spaces. Judge said they plan to invest in late seed to early Series A startups, with about a third of the fund dedicated to growth-stage investing.Claure, who was also previously the CEO of Sprint, helped to conceive the first Opportunity Fund after protests in the US erupted in the wake of <a target="_blank" href="https://www.businessinsider.com/four-minneapolis-police-officers-criminal-charges-george-floyd-death-2020-6">George Floyd's murder</a> in the summer of 2020. He recalled that he turned to <a target="_blank" href="https://www.businessinsider.com/masayoshi-son-softbank-net-worth-lifestyle-silicon-valley-estate-photos-2019-6">Masayoshi Son, SoftBank's CEO</a>, and told him he wanted to start a diversity-focused venture fund. Claure, with Judge, and <a target="_blank" href="https://www.businessinsider.com/softbank-opportunity-fund-black-latinx-founders-moving-miami-2021-6">Shu Nyatta, then a managing partner at SoftBank</a> who now leads Bicycle Capital, a Latin America-focused fund with Claure, and <a target="_blank" href="https://www.businessinsider.com/taskrabbit-ceo-stacy-brown-philpot-steps-down-tech-diversity-2020-6">TaskRabbit CEO Stacy Brown-Philpot</a>, were on the fund's investment committee. And so, the Opportunity Fund was born to invest specifically in Black and Latinx startup founders.In 2023, Black startup founders received <a target="_blank" href="https://techcrunch.com/2024/01/17/funding-black-founders-down-in-2023/">just 0.48% of all venture funding</a> — about $661 million of $136 billion — TechCrunch reported, citing Crunchbase data. The share of funding to Latinx founders is also very similar."The decimal point is in the wrong place," Judge said of what's become the typical funding trend to underrepresented founders. "Our point is the difference between where it is right now and where it should be — that's a lot of money to be made."Judge said that access to capital will have a downstream impact — more <a target="_blank" href="https://www.businessinsider.com/capital-funding-minority-small-businesses-bipoc-lgbtq-women-owned-2021-12">underrepresented founders</a> will be able to pursue their entrepreneurial dreams in areas typically overlooked by traditional investors, and they'll have more diverse company boards and hire diverse workforces. And that ultimately will hopefully lead to more generational wealth for these founders, their families and their communities.For Claure and Judge, the fund's focus is also deeply personal. Both Claure and Judge experienced firsthand the difficulties of raising capital as entrepreneurs of color, and they don't want that same experience for the next generation of startup founders."The joy and satisfaction that I get by helping diverse founders, not one at a time, but 10, 20, 30, 40, 50 at a time," Claure said. "We're going to be able to create an exponential effect."

Marcelo Claure and Paul Judge bought SoftBank's diversity fund. Now they're trying to raise $200 million for it. 

<ul><li>The Softbank-backed startup is planning to head for a listing in the US through a special purpose acquisition company.</li><li><keyword id="2466939" type="PERSON" weightage="20" keywordseo="Grofers">Grofers</keyword> is now seeking a valuation of $1 billion.</li><li>Here’s a deep dive into Grofers’ business.</li></ul>India’s grocery market is estimated to be $600 billion and less than 5% of it is organised, according to HDFC Securities. Grofers has a tiny sliver of that small pie. It is one of the top 10 organised retailers in India but it’s still a tough space to compete in. Who leads in any competitive business also decides who gets a bulk of the investors’ money. In that, Softbank-backed grocery startup Grofers is running against <keyword id="8506093" type="UNKNOWN" weightage="20" keywordseo="Jiomart">JioMart</keyword>, backed by the mighty Mukesh Ambani (Asia’s second richest man), and an early bird like <keyword id="964794" type="COMPANY" weightage="20" keywordseo="BigBasket">BigBasket</keyword>, a unicorn which the $100 billion Tata Group is in talks with for a majority stake. <div type="image" title="Grocery." msid="80874973" hostid="261"></div> Just as tight the competition is in everyday business, raising money may be as difficult as a spate of initial public offerings (IPO) from the retail ⁠— both online and offline⁠— space are in the works, at different stages. Therefore, as <a href="https://www.bloomberg.com/news/articles/2021-02-11/softbank-backed-grofers-said-to-weigh-listing-via-u-s-spac-deal?srnd=technology-vp&amp;sref=zNmRQ0gk">reports suggest</a>, Grofers may opt for a listing in the US through a special purpose acquisition company (SPAC). The reason why a SPAC is better than an IPO is best described by Don Butler, Managing Director at Thomvest Ventures. “An IPO is basically a company looking for money, while a SPAC is money looking for a company,” he recently <a href="https://news.crunchbase.com/news/spac-vs-traditional-ipo-investors-see-benefits-of-blank-check-companies/">said</a>. <cmsannotation type="cmsannotation" annotationid="What is SPAC?" comment="subhead" text="What is SPAC?">What is SPAC?</cmsannotation> SPAC companies are generally formed as “blank cheque” firms with the specific purpose to raise capital through a market debut to acquire another company. Grofers could either raise money from investors by selling shares directly. Or, it could sell to a company that is already listed. When a deal is formed through SPAC, the companies have two years to complete the acquisition. If the deal fails to go through, the SPAC will have to return all money to the investors. Through a SPAC deal, companies don’t have to go through the traditional paperwork hassles needed for an IPO. There are many advantages of opting for a SPAC deal, first the company (here Grofers) would get direct expertise from a company that has been in the business of taking firms to the public markets, and SPACS also acquires companies at a premium, giving more value to the initial investors in the company. And that’s how the Softbank-backed Grofers is now seeking a valuation of $1 billion. The startup had last raised funding in May 2018 when it got a $220 million cheque from SoftBank and was valued around $700 million. <table style="border-width: initial; border-style: none; width: 468pt; table-layout: fixed;"></colgroup></colgroup></colgroup><tbody><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Lead investors in Grofers </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">SoftBank Vision Fund </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Sequoia Capital </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Bennett Coleman </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Abu Dhabi Capital Group </td></tr></tbody></table> Since then, the startup has had several talks for funding and acquisitions with rival companies like Zomato, Paytm Mall, none of which have worked out. <cmsannotation type="cmsannotation" annotationid="Some of the world’s richest people are competing for a slice of India’s growing online retail" comment="subhead" text="Some of the world’s richest people are competing for a slice of India’s growing online retail">Some of the world’s richest people are competing for a slice of India’s growing online retail</cmsannotation> India’s grocery segment which is a $545 billion market, according to Goldman Sachs. It has several players eyeing for the highest market share. Grofers, which until recently enjoyed being in a mostly two-player market, suddenly has many more competitors to watch out for. <table style="border-width: initial; border-style: none; width: 468pt; table-layout: fixed;"></colgroup></colgroup></colgroup><tbody><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Who Grofers is pitted against </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">India’s richest man Mukesh Ambani’s JioMart </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">World’s richest man Jeff Bezos’s Amazon </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">One of the world’s biggest retailers Walmart-owned Flipkart </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">One of India’s biggest conglomerates Tata which is looking to acquire BigBasket and is keen on creating a superapp </td></tr></tbody></table> <cmsannotation type="cmsannotation" annotationid="A deep dive into Grofers’ business" comment="subhead" text="A deep dive into Grofers’ business">A deep dive into Grofers’ business</cmsannotation> Grofers in the last financial year reported an annualized Gross Merchandising Volume of $600 million. Even while Grofers in January 2020 had said that it had achieved breakeven in cities like Delhi and Kolkata, it continued to bleed red in its overall business. As much as 75% of its revenue comes from the top four cities alone. <table style="border-width: initial; border-style: none; width: 468pt; table-layout: fixed;"></colgroup></colgroup></colgroup><tbody><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Grofers </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Revenue </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Loss </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">FY20 </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">₹176.7 crore </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">₹637.4 crore </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">FY19 </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">₹83.6 crore </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">₹448 crore </td></tr></tbody></table>Source: Tofler During the COVID-19 pandemic, tables turned for Grofers as it did for other e-grocery startups like BigBasket, JioMart etc. In a Goldman Sachs report from November 2020, Grofers had said that its revenues were up by 85% from April 2020, as the demand for online grocery grew. “...it has been proﬁtable (contribution margin) on every order delivered since the start of COVID-19,” said the report. Snapshot of Grofers <table style="border-width: initial; border-style: none; width: 468pt; table-layout: fixed;"></colgroup></colgroup></colgroup><tbody><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Monthly transacting users </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Monthly Active Users </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Basket size </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Presence </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">1.5 million </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">8-10 million </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">$28 </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">29 cities </td></tr></tbody></table>Source: Goldman Sachs <cmsannotation type="cmsannotation" annotationid="Betting on private labels" comment="subhead" text="Betting on private labels">Betting on private labels</cmsannotation> Grofers has also been betting big on its private labels business, with the aim of running its business purely with its own brands. In April 2020, the company said that it would pump in $15 million into its private label business. And it made business sense as private labels are high gross margin products for the company, as much as 20% higher in consumer packaged goods and 5% higher in staples, according to the Goldman Sachs report. SEE ALSO: <a href="https://www.businessinsider.in/india/news/spicejet-and-indigo-stocks-take-off-as-a-2-hour-flight-could-now-cost-up-to-13000/articleshow/80873865.cms">SpiceJet and IndiGo stocks take off as a 2-hour flight could now cost up to ₹13,000</a> <a href="https://www.businessinsider.in/business/startups/news/chaos-at-upgrad-mass-resignations-pour-in-as-angry-employees-refuse-to-relocate-instantly/articleshow/80824504.cms">Chaos at upGrad⁠— mass resignations pour in as angry employees refuse to relocate instantly</a>

Here’s why Grofers may allow an American 'blank cheque' firm to buy it out instead of fighting Ambani and BigBasket for IPO

<ul class="summary-list"><li>A <keyword id="11121339" type="UNKNOWN" weightage="60" keywordseo="metaverse" source="Orion">metaverse</keyword> startup got nearly $100 million in a funding round led by <keyword id="11893847" type="UNKNOWN" weightage="60" keywordseo="softbank" source="Orion">Softbank</keyword>. </li><li><keyword id="12460329" type="UNKNOWN" weightage="60" keywordseo="sandbox" source="Orion">Sandbox</keyword> is a virtual world where players can monetize digital assets like NFTs.</li></ul>A metaverse and NFT-focused startup scored nearly $100 million in a round led by a Softbank fund.The startup, known as Sandbox, is is an ethereum-based metaverse that allows gamers to create their own virtual world and monetize digital assets, such as non-fungible tokens. For example, players can purchase plots of land they can build on, <a href="https://www.coindesk.com/business/2021/11/02/metaverse-startup-the-sandbox-closes-93m-series-b-led-by-softbank/">Coindesk reported</a> Tuesday."In this era of new possibilities, The Sandbox is emerging as the main NFT-based, open metaverse, where the content, economy, and even governance will be in the hands of the players, creators, and users who contribute to this virtual world," the company said in its press release.The company is a subsidiary of Animoca Brands, a Hong Kong-based venture capital firm backing the metaverse and GameFi. In its press release, Sandbox Cofunder Sebastien Borget said the Series B funding round will send "a clear statement that the world's most innovative fund believes in Web3 and decentralization as the next major trend." Executives from GoldenTree Asset Management, among others, also invested in the round, the <a href="https://www.animocabrands.com/the-sandbox-raises-93m-in-round-led-by-softbank-vision-fund-2-to-grow-its-open-nft-metaverse">press release</a> said. The startup has partnerships with brands and people, including Snoop Dogg, The Walking Dead, and <keyword id="11893898" type="UNKNOWN" weightage="60" keywordseo="crypto" source="Orion">Crypto</keyword>Kitties, and has more than 500,000 users with connected crypto wallets. Its cryptocurrency, aptly named "Sandbox," has a $2.3 billion market valuation, according to data from CoinMarketCap. Monday, another NFT-focused company called <a href="https://markets.businessinsider.com/news/currencies/crypto-podcaster-andrew-steinwold-nft-fund-andreessen-horowitz-winklevoss-twins-2021-11">Sfermion</a> got a $100 million funding round with big-name backers like the Winklevoss twins and two general partners from Andreessen Horowitz.The announcements follow news that social media platform Facebook would be <a href="https://www.businessinsider.com/what-is-metaverse-facebook-mark-zuckerberg-roblox-animal-crossing-2021-8">changing its name</a> to Meta in an effort to forge into the future of the internet, the metaverse.

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