Japanese dealmaker plans to raise $100 billion fund every few years to invest in tech startups

An all-out blitz on the heart of Silicon Valley venture capital, Sand Hill Road.

Japanese dealmaker plans to raise $100 billion fund every few years to invest in tech startups

By Bloomberg Businessweek

Two years ago, Masayoshi Son, chief executive officer of SoftBank, sat in a Gulfstream jet high above the Arabian Gulf, en route to meet with potential investors in a new fund that would invest in technology startups. He was going through his presentation with Rajeev Misra, a key lieutenant, when something stopped him.

One of the slides included the proposed size of the fund: $30 billion. The figure would make the Vision Fund, as Son had named it, about four times the size of the largest venture capital fund ever created and bigger than any private equity fund in history.

Son stared at the number for a moment. Then he deleted the three and replaced it with a one and another zero. “Life’s too short to think small,” he told a stunned Misra.

When Son came to the $100 billion slide in his presentation a few hours later, the prospective investors—executives from a state-owned fund in the Middle East—laughed. Son didn’t, continuing his presentation as if nothing had happened. “He didn’t miss a beat,” recalls Misra, now the fund’s CEO.

SoftBank’s Vision Fund would gather almost $100 billion, including $45 billion from Saudi Arabia’s Public Investment Fund, as well as capital from Apple Inc., the government of Abu Dhabi, and others. “One hundred was a simpler number,” Son says during a September interview at the Tokyo headquarters of SoftBank Group Corp., a sprawling conglomerate that includes an enormous Japanese mobile phone carrier (also called SoftBank), a leading chipmaker (Arm Holdings Plc), and a majority stake in Sprint Corp., the U.S. wireless carrier.

As an investor, Son has been prescient. He was one of the earliest backers of Yahoo! and then teamed up with the dot-com-era darling to launch Yahoo! Japan, a property that wound up being much more valuable than its parent. In 2000 he put about $20 million into Alibaba Group Holding Inc. That stake is now worth roughly $120 billion.

But the Vision Fund is something new: An all-out blitz on the heart of Silicon Valley venture capital, Sand Hill Road. In less than a year since the fund first began making investments, it has already committed $65 billion to acquire big stakes in Uber, WeWork, Slack, and GM Cruise. Son tells Bloomberg Businessweek that he plans to raise a new $100 billion fund every two or three years and will spend around $50 billion a year. For perspective, in 2016, the entire U.S. venture capital industry invested $75.3 billion, according to the National Venture Capital Association.

More: Bloomberg Businessweek.

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