SoftBank Boosts bKash's Valuation to $2 Billion with Strategic Investment

SoftBank Vision Fund II is poised to dramatically increase the valuation of Bangladesh's leading mobile financial services provider, bKash, by injecting $250 million for a significant stake in the company. According to Dr. Ahsan H. Mansur, chairman of Brac Bank—the majority stakeholder in bKash—the investment has already elevated bKash's valuation to over $1,700 million.

SoftBank Boosts bKash's Valuation to $2 Billion with Strategic Investment
SoftBank Boosts bKash's Valuation to $2 Billion with Strategic Investment

SoftBank Vision Fund II is poised to dramatically increase the valuation of Bangladesh's leading mobile financial services provider, bKash, by injecting $250 million for a significant stake in the company. According to Dr. Ahsan H. Mansur, chairman of Brac Bank—the majority stakeholder in bKash—the investment has already elevated bKash's valuation to over $1,700 million. Once SoftBank completes its share subscription, the company's valuation is expected to soar to approximately $2 billion, or more than 17,000 crore Tk. This statement was made during a phone interview with The Business Standard on Saturday.

The concept of valuation refers to the total price the market is willing to pay for a company. The Brac Bank board recently approved both the share subscription agreement between bKash and the new foreign investor, as well as the share purchase agreement among the existing stakeholders and the newcomer. This arrangement ensures that SoftBank Vision Fund II will control a 20% stake in bKash, purchasing less than a 10% stake from undisclosed existing shareholders, aside from Brac Bank which has confirmed that this deal will not diminish its shares in the mobile financial service provider.

Founded in 2011 by Brac Bank and Money in Motion LLC USA, bKash has pioneered mobile financial services in Bangladesh. It has since attracted notable shareholders including the International Financial Corporation in 2013, the Bill and Melinda Gates Foundation in 2014, and Alibaba Concern Ant Financials in 2018. When Ant Financials acquired a 20% stake in bKash, the valuation was pegged at $880 million. Impressively, in less than four years, bKash managed to more than double this valuation.

At the time of Ant Financials' investment, bKash boasted fewer than 4 crore customers, with annual revenue of 1,880 crore Tk and transaction volumes through mobile accounts reaching 2.5 lakh crore Tk annually. Today, the customer base has expanded to over 5.1 crore, annual revenue has climbed to more than 3,000 crore Tk, and transaction volume has surged to 5.2 lakh crore Tk over the last 12 months.

Despite reporting moderate losses for the past two years due to costs associated with business expansion amid intensifying competition from Nagad, another emerging player in the MFS sector, bKash has not deterred investors. Last year, bKash reported a loss of 81 crore Tk, but investors remain undeterred, appreciating the business's emphasis on scaling up for market leadership, growth, and innovation.

SoftBank, which oversees SoftBank Vision Fund I and SoftBank Vision Fund II with a combined size of approximately $150 billion, is expanding its footprint in the burgeoning markets of the Indian subcontinent. SoftBank has significant investments in India's MFS giant Paytm and the e-commerce powerhouse Flipkart. bKash marks the first Bangladeshi enterprise to attract SoftBank's attention.

Following the announcement of SoftBank's investment, Brac Bank shares soared to the upper circuit breaker at 48.7 Tk, gaining 9.9% at the Dhaka Stock Exchange on Thursday. A circuit breaker prevents a stock's price from moving beyond a predetermined level in a single session, ensuring market stability.