SoftBank plans to invest in 100 new companies with Vision Fund 2
SoftBank stories are usually dominated by Masayoshi Son, who is the CEO of SoftBank Group. The real investment managers are rarely in the spotlight as often. Today, we bring you the latest news as announced by Rajeev Misra, CEO at SoftBank Investment Advisers UK, who oversees SoftBank's $100 billion Vision Fund and is playing a big role in the next one as well.
At the Future Investment Initiative in Riyadh on Wednesday, Misra said, "We have 86 companies in our portfolio in fund one, with another 100 in fund two,” indicating that the second vision fund will invest in 100 companies.
The first Vision Fund of $100 billion has made headlines since its establishment as the biggest tech investment fund in the world. Till date, it has seen 86 companies in its portfolio.
The Vision Fund 2 is looking to break the record to raise $108 billion. However, it has been facing challenges on and off, especially now after the WeWork debacle and other portfolio companies struggling with profitability and not doing as well as expected.
SoftBank itself has a $38 billion stake in Vision Fund 2. So far, this makes them the biggest investors in the fund, as compared to the previous Fund that saw Saudi Arabia’s Public Investment Fund (PIF) and UAE’s Mubadala be the largest stakeholders. There hasn’t been any news confirming or denying the involvement of them in the sequel.
Nevertheless, in the event Vision Fund 2 raises its target amount, Rajeev said they would be looking to invest in 100 companies, adding that the total of “186 companies interacting with each other and doing business with each other will be immense."
Businessweek reported in 2018 that Masayoshi Son, Chairman and CEO of SoftBank, planned to raise $100 billion every 2-3 years, and invest $50 billion each year.
Misra also said, “The fundamental premise of all our portfolio companies is to disrupt regular traditional businesses that are run inefficiently, for whatever reason it may be."
Indicating an investment focus on startups using AI and other technologies of the future, Misra added that the traditional businesses “run inefficiently because they have too many middlemen, they run inefficiently because of legacy systems, because of cost management, and to use AI and technology to go in and disrupt those industries -- whether it’s how hotels are run, how cars are sold, healthcare, how homes are sold, etc."
The aim of investing in 100 companies, with the average cheque size that SoftBank issues seems ambitious considering it just injected $10.7 billion in WeWork to buy out its founder Adam Neumann, remove him from the board and provide working capital for the company to (hopefully) get its bearings right and turn towards profitability.