SUMMARY
Firm’s portfolio projected to touch $1.8 Tn valuation in the next two decades
Masayoshi Son said the company’s earnings for 2018 crossed $18.5 Bn
As of June 2019, the group’s market cap is recorded at $92.9 Bn
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Masayoshi Son, CEO of Japanese conglomerate SoftBank, projected that the firm’s portfolio could potentially grow 33-times to reach a $1.8 Tn (200 Tn JPY) valuation in the next two decades.
However, he later added that “this is not a business plan, it is a big dream— so you should give it some discount.”
Speaking at SoftBank Group’s 39th annual general meeting of shareholders yesterday in Tokyo, Son noted that the SoftBank Group’s earnings before interest and taxes (EBITDA) has crossed over $18.5 Bn (2 Tn JPY) in FY18. Son attributed this growth to its technology focused investment corpus SoftBank Vision Fund.
As of June 2019, the group’s market cap. is recorded at $92.9 Bn (10 Tn JPY) with a 16% annual growth rate. Further, the current equity value of SoftBank holdings is $41.8 Bn (4.5 Tn JPY).
Son also noted that artificial intelligence is going to be the biggest revolution in human history and said, “We envision SoftBank Group to lead the AI revolution similar to how a conductor leads an orchestra.”
He noted SoftBank’s investments such as Guardant, OYO, Uber, and ByteDance which have emerged as AI innovation leaders.
SoftBank Vision Fund In India
SoftBank Vision fund was set up in 2017 with a total corpus of $100Bn. Most of this vision fund was raised from Saudi Arabia and Abu Dhabi. Overall, the company has invested around $10 Bn so far in Indian startups.
SoftBank has witnessed an 80% year-on-year growth in its operating income for FY 2019. Son-led company attributed this growth to an unrealised gain of about $12.5 Bn from its investments in ride-hailing company Uber, Indian hospitality company OYO and other portfolio companies. Overall, its investments in Flipkart and OYO paid off with a gain of $2.7 Bn, split between realized and unrealised gains.
The sale of SoftBank’s share in the Indian ecommerce giant Flipkart resulted in a gain of $1.3Bn for the Japanese company. Flipkart was acquired by Walmart for $16Bn in August 2018. OYO’s valuation has increased to $1.4Bn in FY 2019.
SoftBank’s other key investments in India include Ola, OYO, Hike, Paytm, FirstCry, Grofers, Delhivery, Automation Anywhere, and Paytm Mall. Earlier this month, SoftBank was said to be in talks to launch an initial public offering of its $100 Bn SoftBank Vision Fund.
During his visit to India in April 2018, CEO Son had reiterated his commitment to invest further in the Indian landscape. Sharing his vision for SoftBank’s portfolio, he said, “Making local companies go global while global to go local’.
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