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Japanese conglomerate Softbank Corp. has announced the first close of its ambitious Vision Fund (SVF) which aims to invest in tech companies globally. As of now, $93 Bn has been poured in, with an aim to raise the corpus to $100 Bn by the end of this year.
The Saudi Kingdom’s Public Investment Fund will infuse $45 Bn and $28 Bn will be contributed by Softbank. The rest of the sponsors include Abu Dhabi’s Mubadala Development Co along with global tech giants – Apple, Foxconn, Qualcomm and Sharp.
The fund is currently headed by Softbank Group founder and CEO Masayoshi Son and India born Rajeev Misra, designated as CEO of SVF, at the time of launch in October 2016.
As stated by Son to TOI, “Technology has the potential to address the biggest challenges and risks facing humanity today. The businesses working to solve these problems will require patient long-term capital and visionary strategic investment partners with the resources to nurture their success. The SoftBank Vision Fund is consistent with this strategy and will help build and grow businesses creating the foundational platforms of the next stage of the Information revolution.”
SVF aims to invest in sectors such as IoT, AI,robotics and others with a ticket size between $100 Mn-$500 Mn. “SoftBank Group will very much continue to do its own investments, as and when the need arises in any geography. But it can be assumed that all large investments — $500 million-plus — will happen through the fund,” according to ET sources.
As earlier reported by Inc42, Softbank’s Indian investments will be driven through this $100 Bn fund. The company first announced its intentions to invest $10 Bn in Indian tech firms in October 2014 and later, in December 2016, Son also predicted that the amount will surpass $10 Bn in the coming years.
To date, SoftBank has infused $3.5 Bn has in Indian consumer Internet and tech companies like OYO Rooms, Grofers, Housing, InMobi, Snapdeal and Ola. There are also plans to invest a large amount in Flipkart, post the merger deal announcement with Snapdeal.
On the other hand, according to people close to the development Paytm, which recently raised $1.4 Bn from Softbank, has not get the capital from this fund. Also, with ongoing clashes between Ola founders and SoftBank over stake holding issues, can also affect the chances of the company receiving funding under the new fund.
At present, a tug-of-war can be seen inside the Softbank camp. On one side, Son is making all possible effort to get the Flipkart-Snapdeal merger deal underway, thereby trying to consolidate major losses in Indian investments, On the other side, it has to deal with several legal tangles involving former Softbank President Nikesh Arora and the current President and CFO Alok Sama. Both have been recently held accountable by anonymous Softbank stakeholders on charges of receiving kickbacks for their investments in India. While the SoftBank may undergo fluctuations in terms of leadership, there is little doubt that it firmly has its eye on the prize – investing for long-term growth and phenomenal returns.
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