- Masayoshi Son has officially announced the Vision Fund 2 — which is a fund with a target $108 billion that would invest in up-and-coming technology companies
Masayoshi Son — the founder of SoftBank Group — has announced a second major fund for the company’s technology investments. The Japanese company is planning to raise a total of $108 billion for the Vision Fund 2, which would make it a bit higher than the Vision Fund’s $100 billion.
In the case of Vision Fund 2, SoftBank is committing $38 billion of its own money and is going to be replacing Saudi Arabia as the largest investor, according to Bloomberg. Saudi Arabia’s Public Investment Fund had invested $45 billion in the original Vision Fund. Some of the investors expected to be joining the fund include Apple, Microsoft, Foxconn, and the sovereign wealth fund of Kazakhstan. Plus Son is also receiving broad support from a number of Japanese financial institutions.
Son plans to raise a new fund every two or three years to invest in up-and-coming companies that focus on a wide variety of technologies such as AI and mobility. This past June, SoftBank disclosed that the initial Vision Fund earned 62% returns so far following 71 investments at a total of $64.2 billion.
“I wasn’t sure it would be possible to raise $100 billion without Saudi money, but it looks like it is,” said Sanford C. Bernstein & Co analyst Chris Lane via Bloomberg. “I think it was a conscious decision by Softbank to decrease the influence of the Saudis.”
The reason why SoftBank is likely avoiding money from Saudi Arabia is due to the Jamal Khashoggi controversy. However, SoftBank spokesman Daisuke Sawatake said that Saudi Arabia’s PIF and Mubadala Investment Co. — both of which were key partners in the first fund — are in talks about possible investments.
Mizuho Financial Group Inc., Sumitomo Mitsui Financial Group Inc., Mitsubishi UFJ Financial Group Inc., Dai-ichi Life Holdings Inc., Sumitomo Mitsui Trust Holdings Inc., Daiwa Securities Group Inc., and SMBC Nikko Securities Inc. are the Japanese financial firms that have signed MOUs so far. And other contributors will include Standard Chartered Plc along with an unnamed Taiwanese investor, and the fund’s management.
Mizuho — an analyst at SMBC Nikko Securities in Tokyo — also write in a research report that the broader group of investors and SoftBank’s greater contribution will grant the Japanese company more influence. Plus Kikuchi also wrote that SoftBank may sell stakes in Alibaba Group Holding and Sprint to pay for its investment in this fund.
The original SoftBank Vision Fund was announced in October 2016 and it took about seven months for the first major closing. Besides Saudi Arabia, SoftBank contributed $28 billion and Mubadala put in $15 billion. And Qualcomm and Sharp were also investors in the fund.
While Masa is focused on the SoftBank investments, the day-to-day management of the company’s domestic telecommunications operations is being led by Ken Miyauchi. Miyauchi is also known for engineering the sale of the Sprint wireless business to T-Mobile US Inc., which is currently pending regulatory approval in the U.S.
Some of the companies that SoftBank invested in include Uber, Nuro, DoorDash, Opendoor, Automation Anywhere, WeWork, SoFi, China-based Didi Chuxing, India-based Ola, and Singapore-based Grab.
