Softbank weighs listing for $100bn tech fund

Japanese giant examines float for vast Vision Fund that could unleash flood of cash for start-ups

Natasha Bernal

Matthew Field

JAPAN’S Softbank is considering floating its hugely influential $100bn (£77bn) Vision Fund as well as launching a second large investment fund, in moves that could result in a flood of new funding for the global technology sector.

Masayoshi Son, the billionaire founder of Softbank, is also reportedly in negotiations with the Sultanate of Oman to raise billions of dollars of fresh capital.

The new funds will join existing investors in its huge venture capital investment business, including wealth funds from Saudi Arabia and Abu Dhabi, as well as companies like Apple.

The Japanese technology conglomerate is planning to rapidly expand the fund, which has invested in the likes of Uber and Wework, doubling its employee headcount to 800 over the next 18 to 24 months.

A public offering for the Vision Fund, which is one plan being considered to raise extra funding to keep up with the pace of Mr Son’s investing, could take place as soon as this year, sources told The Wall Street Journal. The listed business could be modelled on other public investment giants, like Warren Buffett’s Berkshire Hathaway.

The Vision Fund has been described as the largest pool of private capital ever raised. Mr Son has turned Softbank, once a telecoms company, into an investment giant that has pumped billions of dollars into start-ups.

Softbank was planning to invest the $100bn it raised over the space of four years, but has managed it in just two. Among the investments the fund has made since it closed in 2017 are Ridehailing service Grab, Nvidia, home insurance app Lemonade, dog-walking app Wag and Indian retailer Flipkart.

“As a global asset manager we evaluate many sources of capital,” a Vision Fund spokesman said.

As well as plans to raise billions more for its current Vision Fund, Softbank could also launch a second fund to continue its string of investments, according to Rajeev Misra, Mr Son’s deputy.

The second fund would be at least as large as the Vision Fund. Saudi Arabia’s Public Investment Fund has already proposed committing up to $45bn to a new fund. Since it launched the London-headquartered Vision Fund two years ago, Softbank has launched an investment venture capital fund in South America, and confirmed plans to launch a venture capital fund for early stage investment run by Softbank Ventures Asia.

Softbank is also planning to open a Vision Fund office in the Middle East. Another fund would continue Softbank’s unprecedented run of venture investing that has transformed dozens of start-ups in the past two years and, in some cases, led to soaring valuations.

“Their strategy is to find companies who are scaling and likely to turn into winners, and to arm those companies with a ton of capital and move them ahead of the market,” said Hussein Kanji, a partner at venture capital firm Hoxton Ventures. “People don’t give them enough credit. Some of their returns are actually quite good. The challenge now is repeating the magic trick.”

Softbank could, however, be close to some initial returns on some of its biggest investments. It holds a 15pc stake in ride-hailing firm Uber, which is expected to float in the US in the coming weeks for about $91bn. Softbank invested $7bn in Uber in late 2017.

It also holds a stake in Wework, which has also filed to list later this year. Softbank invested $10bn in Wework earlier this year.