• 23 hours Three Energy Casualties In The Coronavirus Crisis
  • 2 days Markets Crumble As Coronavirus Panic Peaks
  • 2 days Cobalt May Be The Key To Clean Hydrogen Fuel
  • 4 days How Taxpayers Are Bankrolling The EV Revolution
  • 5 days The Coronavirus Is Crushing China’s Car Market
  • 6 days Fighting For Survival In The Streaming War
  • 7 days Want A Job? Forget About A Bachelor’s Degree
  • 7 days Another Major Car Maker Is Backing Hydrogen
  • 8 days Are Americans Finally Sold On Soccer?
  • 8 days Is The Tech Bubble About To Burst?
  • 9 days Coronavirus Could Cost Tourism Industry $80 Billion
  • 9 days What Web Traffic Trends Can Tell Us About The World
  • 9 days Miners Face Greater Headwinds
  • 10 days Boris Johnson Proposes Billion Dollar Bridge To Northern Ireland
  • 11 days Goldman Slashes Oil Price Forecast By $10
  • 12 days Tesla Raises $2 Billion In Share Selloff
  • 13 days What The T-Mobile Takeover Of Sprint Really Means For Markets
  • 13 days The U.S. Has Charged Huawei With Racketeering And Conspiracy
  • 13 days How Hydrogen Could Become The Fuel Of The Future
  • 14 days Millennials Can’t Retire, But They’ll Still Have To Help Their Parents
What Will Drive The M&A Market In 2020?

What Will Drive The M&A Market In 2020?

LVMH purchasing Tiffany and TechnipFMC…

Airbnb IPO Under Threat As China's Economy Drags

Airbnb IPO Under Threat As China's Economy Drags

The coronavirus outbreak in China could derail…

  1. Home
  2. Investing
  3. Other

Soft Bank Locks Down $108 Billion For Vision Fund 2

Tokyo

For a minute there, it looked like the investors who had helped finance Soft Bank's original Vision Fund were finally beginning to question the strategy of paying exorbitant sums for stakes in Silicon Valley's most popular unicorns. But, aside from a handful of embarrassing flops, the strategy appears to have paid off: Because even though Soft Bank's original patrons, the Saudis and Emiratis, have expressed their reservations, it appears the Japanese telecoms-giant-with-a-VC-arm has succeeded in raising its second fund in less than three years.

According to WSJ and the FT, despite the Uber IPO's embarrassing flop, Soft Bank (the largest single backer of Uber; it is reportedly holding on to its shares) has locked down commitments for $108 billion from Microsoft, Apple, Standard Chartered, Goldman Sachs, the sovereign wealth fund of Kazakhstan and an array of other investors - though the Saudis and Emiratis have balked, they're reportedly still in talks with Soft Bank about a possible commitment.

Several Japanese and Taiwanese banks and insurers have also reportedly committed capital.

Deals

(Click to enlarge)

Soft Bank Chairman Masayoshi Son said he wants the new fund to focus on AI, which the billionaire Soft Bank founder believes will explode in usefulness as the amount of real-world data gathered by sensors, cameras and other machines would allow companies to better leverage these connections. And because of an even larger investment from his company, it's likely that Masayoshi Son will have even more control over investment decisions.

"The power to predict the future is about to emerge," Mr. Son said last week at a Tokyo conference SoftBank held for its corporate clients. "The amount of data will grow by a million times over the next 30 years." Related: Battery Metals Face Looming Supply Crunch

That means the Vision Fund II will be a boon for any trendy AI startups, now that they know Masayoshi Son will pay an absurd premium for a 10% stake.

But like last time, Soft Bank is also committing a large chunk of its capital. The fund will commit $38 billion to this latest fund, up from $28 billion in the first Vision Fund. To make this work, the telecoms giant will need to liquidate some of its investments. For that to happen, it would help for the Sprint-T-Mobile merger to finally go through, but the opposition by the federal government and some state AGs has left its success very much in question.

The Vision Fund was credited with single-handedly raising valuations across the unicorn space by making $100 million the new minimum check size. Suddenly, Sequoia Capital and other major VC firms had to raise multi-billion-dollar investment funds just to compete and get stakes in valuable startups.

Now, with WeWork and Slack next up on the hot IPO docket, Vision Fund II has arrived to pump up the valuations of the next round of unicorn darlings. And remember: The faster they burn cash, the larger the valuation multiple.

By Zerohedge

More Top Reads From Safehaven.com

Back to homepage

Leave a comment

Leave a comment