SoftBank's $690M Sinch stake a customer service bet

The customer is still king, it seems — especially with Christmas coming.

Japan's SoftBank Group has just spent $690 million for a 10.1% stake in Sinch, a Swedish cloud-based customer engagement company.

The move comes hard on the heels of Facebook's November 30 decision to acquire Kustomer, which specializes in customer service platforms and chatbots, for $1 billion.

Buying stakes is a Sinch

Sinch, the top performer in Europe's Stoxx 600 index this year, lets businesses perform messaging and voice and video calls.

It has benefited greatly from the rise in virtual communication during the coronavirus pandemic. Its share price has grown by nearly 300% in 2020.

Sinch's chief executive, Oscar Werner, said his company will use the money to invest in new acquisitions.

The company is earning a profit, so doesn't need the cash to run its operations.

It has bought four other companies so far this year: SAP Digital Interconnect for £198 million (US$264 million); Brazil's Wavy for £98 million ($131 million); Antwerp-based Chatlayer for £4 million ($5 million); and India's ACL Mobile for £56 million ($75 million).

The shares, which will be held by SoftBank's fund management subsidiary SB Management, takes the form of stakes acquired from other major shareholders and a direct issue of new stock.

Sellers include Cantaloupe – whose owners include Sinch co-founders Robert Gerstmann, Henrik Sandell and Kristian Mannik – and Salvis Investment, owned by Johan Hedberg, another cofounder.

For cloud customer service, press one

This week has seen several major shake-ups in the currently thriving business of helping businesses engage with customers virtually.

Salesforce announced Tuesday it was buying work-chatting service Slack for $27.7 billion, in the biggest acquisition in its 21-year history.

Marc Benioff, the company's flamboyant chief executive and early proponent of "software as service," is understood to be chasing Microsoft's lead in helping companies manage their customer relationships.

The popularity of Microsoft Teams during the pandemic has made Microsoft a fearsome competitor in this space.

And every day over 175 million people contact businesses on WhatsApp (which Facebook acquired in 2014), Mark Zuckerberg's company observed about its own customer service spending spree this week.

The whale that got away

It is a return to the purchasing counter for the SoftBank Group.

Recent asset sales mean Masayoshi Son's group nonetheless has $80 billion in cash, after selling down stakes in Alibaba and the Japanese telecom business SoftBank Corp.

Son's group is winding down its US derivatives exposure by letting its options expire.

This means pulling back from a strategy that has lost it $2.7 billion on derivatives between July and September while winning the moniker of the "Nasdaq whale."

The group still turned a $6.1 billion profit in the three months ending in September.

But some observers have questioned whether these transactions fit with the chief executive's vision of investing in artificial intelligence and related emerging technologies, or if the group is simply being a day trader.

The Sinch stake though is not SoftBank Group's only attempt to buy parts of likely pandemic winners. In October, the group invested $215 million in Kahoot!, an online game-based education platform listed in Norway.

Win or lose, Son has rarely been one to wait quietly on the sidelines.

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— Padraig Belton, contributing editor, special to, Light Reading