• 311 days Will The ECB Continue To Hike Rates?
  • 311 days Forbes: Aramco Remains Largest Company In The Middle East
  • 313 days Caltech Scientists Succesfully Beam Back Solar Power From Space
  • 713 days Could Crypto Overtake Traditional Investment?
  • 718 days Americans Still Quitting Jobs At Record Pace
  • 720 days FinTech Startups Tapping VC Money for ‘Immigrant Banking’
  • 723 days Is The Dollar Too Strong?
  • 723 days Big Tech Disappoints Investors on Earnings Calls
  • 724 days Fear And Celebration On Twitter as Musk Takes The Reins
  • 726 days China Is Quietly Trying To Distance Itself From Russia
  • 726 days Tech and Internet Giants’ Earnings In Focus After Netflix’s Stinker
  • 730 days Crypto Investors Won Big In 2021
  • 730 days The ‘Metaverse’ Economy Could be Worth $13 Trillion By 2030
  • 731 days Food Prices Are Skyrocketing As Putin’s War Persists
  • 733 days Pentagon Resignations Illustrate Our ‘Commercial’ Defense Dilemma
  • 734 days US Banks Shrug off Nearly $15 Billion In Russian Write-Offs
  • 737 days Cannabis Stocks in Holding Pattern Despite Positive Momentum
  • 738 days Is Musk A Bastion Of Free Speech Or Will His Absolutist Stance Backfire?
  • 738 days Two ETFs That Could Hedge Against Extreme Market Volatility
  • 740 days Are NFTs About To Take Over Gaming?
  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