SoftBank Vision Fund Is Here To Stay and has Plans to Keep Expanding to New and Outstanding Tech Ventures
May 23rd, 2018 10:06 am | By admin | Posted In Business News
After an unusual round of massive investments in tech companies worldwide, SoftBank Vision Fund’s CEO Masayoshi Son said that he expects to launch Vision Fund II very soon. This shocking news means that the fund will continue shaking the global business landscape, particularly in the technology industry.
Softbank Vision Fund is undoubtedly one of the most relevant factors driving the future of many tech companies right now. Everybody is talking about this fund, not only in the United States but also in Asia and Europe. Why is that? The answer is very simple. The fund has gathered a sky-high amount of US$ 100 billion. Even for Silicon Valley, this is an enormous amount of money. This figure, according to CNN, “far exceeds the $64 billion that all venture capital funds raised globally in 2016; it is four times the size of the biggest private-equity fund ever raised”.
But it is not only the fund’s size what made most financial and technology firms to be amazed. It is also the uncommon pace of its investment decisions. In less than 12 months, the Vision Fund has invested US$30 billion in 30 companies. The goal is to reach 70-100 companies, according to Rajeev Misra, CEO of the Vision Fund.
Some of the deals have been certainly huge, like the US$9.3 billion investment to purchase Uber shares. With this purchase, the consortium led by SoftBank will own 15% of the company. More than $1 billion was also allocated to ARM Holdings, NVIDIA, WeWork, Flipkart, OneWeb, and Roivant. But not everything is being poured into the online arena. SoftBank is also creating the world’s biggest solar power plant in Saudi Arabia and the world’s largest international soccer tournament. The company is also an advocate of the Singularity concept, which states that artificial intelligence will be more powerful than human intelligence. To sum up, the common element shared by all their investments is the allocation of vast amounts of money into promising tech projects.
With such relevant investments made in several continents and industries, we can ask, where does this giant fund come from? The money comes primarily from the Kingdom of Saudi Arabia, the Japanese SoftBank Group Corp and the Mubadala Investment Company of the United Arab Emirates. Other names involved in the fund are Apple Inc., Foxconn Technology Group, Qualcomm Incorporated, and Sharp Corporation.
The Fund pursues to invest “in businesses and foundational platforms that SoftBank believes will enable the next age of innovation and make tomorrow’s world possible”, according to Softbank Vision Fund’s website. The site also says that the Fund “will seek to acquire minority and majority interests in both private and public companies, from emerging technology businesses to established, multi-billion dollar companies requiring substantial growth funding”.
Since the appearance of SoftBank Vision Fund many people in the tech world are excited about the infusion of vast amounts of money into tech start-ups. Some large firms will become larger and maybe more innovative thanks to the cash they receive from the Vision Fund. But other business people think that such sums invested so fast are distorting company’s valuations and will eventually run small firms out of business, as their efforts will be consumed by their larger peers. Indeed, the Vision Fund is only interested in large deals. Its minimum investment check is US $100 million, as said by SoftBank Vision Fund representatives. The Fund is even impacting the labor market since it is already recruiting people from all over the world to manage its operations.
Whether Soft Bank Vision Fund will be beneficial for the future of our world or not is not clear yet. What it is clear, however, is that the Fund is here to stay!
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