George Soros, who made controversial remarks about Prime Minister Narendra Modi at the Munich Security Conference, has investments in new age tech and startups from India.
The single-biggest investment made by the hedge fund investor and philanthropist is in Freshworks, the first and only Indian software-as-a-service (SaaS) unicorn to be listed on the Nasdaq. Founded by Girish Mathrubootham in 2010 in Chennai, Freshworks made a sensational debut in September 2021 at a valuation of $13 billion. But amid the tech meltdown, the stock is down 68% from its high of $50 to $15.76, as of February 17.
It was in the third quarter of 2021 that the stock first made it to the near $3 trillion portfolio of Soros Fund Management. But in the subsequent quarter, as the stock tanked, the fund sold its entire holding of 27,000 shares. In the first quarter of 2022, the fund re-initiated a fresh position by buying a record 1.95 million shares when the stock was averaging $20.34. But unlike the previous occasion, even as the stock kept sliding over the subsequent two quarters, Soros’ fund increased its exposure to 2.26 million shares (1.12% of assets), which is currently worth $35.68 million.
Incidentally, Soros’ purchase comes amid three U.S.-based law firms, The Schall Law Firm, Scott+Scott, and Bragar Eagel & Squire, filing a suit against Freshworks, alleging that the company made false and misleading claims about the business when it went public. Though the company’s revenue grew 34% to $498 million in 2022, its net loss increased 20.9% to $232 million. The Chennai-based company with a base in California offers business software tools across three verticals: customer experience, IT services management and sales & marketing.
While Soros has no direct investments in India, he has plugged into the local startup ecosystem through SONG Investment Company (SONG Fund). The $17 million early-stage fund is backed by Soros Economic Development Fund, Omidyar Network, and Google, with the Centre for Emerging Market Solutions at the Indian School of Business acting as a strategic partner. The fund was, in turn, managed by Aspada, a holding company backed by the Soros Economic Development Fund. In September 2019, Aspada was sold to the LGT Group (Liechtenstein) to create Lightrock. As of December 2022, Lightrock India had 53 investments, with the recent deal done on December 15, 2022, when fintech player Neogrowth raised ₹300 crore. The fund, which went through multiple investing vehicles across different stages of investing, has managed 8 exits, including that of MediBuddy, Vogo, and Lithium Urban Technologies.
Incidentally, in 2010, Soros had bought a 4% stake in the Bombay Stock Exchange for $35 million (₹163 crore) from Dubai Financial Holding, owned by the Emirates ruler Sheikh Mohammed bin Rashid al-Maktoum. But he exited at a loss by offloading the entire stake in the IPO in 2017.
The 92-year-old has been in the news for his remarks on Prime Minister Narendra Modi that the crisis at Gautam Adani’s business empire had shaken the faith of investors in India and that it could open “the door to a democratic revival” in the country. He went on to comment that Modi would have to be answerable to foreign investors and the Parliament on allegations levelled at Adani.
The Left-progressive political-donor billionaire is also the founder of the Open Society Foundation (OSF), which provides grants to groups, individuals and non-governmental organisations that promote democracy and freedom of speech. In 2020, OSF initiated a legal battle by moving the Delhi HC against the Modi government’s decision to place it under a “watch list” for supporting NGOs and associations that were not registered under the Foreign Contribution Regulation Act.