Report: SoftBank Looking To Raise $10 Billion To Support Its Vision Fund Companies

By Amit Chowdhry ● March 21, 2020
  • SoftBank is reportedly looking to raise $10 billion so that the first Vision Fund can support the portfolio companies that were affected by COVID-19

SoftBank Group is reportedly looking to raise an additional $10 billion so that the first Vision Fund can support the portfolio companies that were affected by the COVID-19 (coronavirus) pandemic, according to sources with Bloomberg. To raise the funds, SoftBank is talking to outside investors for $5 billion. And then SoftBank will match that investment with $5 billion of its own capital.

One of the factors working against SoftBank is the major decline in the price of oil, which is affecting Middle Eastern sovereign wealth funds. The coronavirus has been causing a decline in ride-hailing services and certain WeWork locations run by We Co. have been closed down due to the outbreak.

Prior to the pandemic, SoftBank founder Masayoshi Son has been working to keep the company’s investors calm about some of its investments not living up to its inflated valuations. SoftBank’s stock price dropped nearly 50% in the past month and saw a drop in as much as $50 billion in market capitalization.

Some of the biggest backers of the Vision Fund include Saudi Arabia’s Public Investment Fund and Abu Dhabi’s Mubadala Investment Co. These organizations provided around $80.5 billion of the total $98.6 billion according to regulatory filings discovered by Bloomberg.

A certain amount of the remaining cash will be used for paying back a coupon connected to the Saudi investment. And the new capital will also be used for supporting the struggling portfolio companies and invest in opportunistic acquisitions of smaller rivals that saw drops in valuations.

It has been reported that DoorDash may have seen a jump in orders due to quarantining and social distancing due to the COVID-19 pandemic.

There are 88 companies in the first Vision Fund and SoftBank will also review opportunities in the successor fund called Vision Fund 2.