HT Estates

SoftBank’s plans for new mega fund hit

- Reuters feedback@livemint.com

BENGALURU/TOKYO/LONDON: SoftBank Group founder and chief executive officer (CEO) Masayoshi Son is struggling to raise money for a second massive technology investment fund in the wake of the failed public offering of office-rental company WeWork and sliding valuations of other major investment­s, according to two people familiar with the situation.

Son is still determined to go ahead with Vision Fund 2 even though some lieutenant­s have urged a delay, the two people with knowledge of SoftBank’s internal discussion­s told

But it is likely to be far smaller, at least at the outset, than the $108 billion that SoftBank said it had lined up when it announced the fund in July, these people said.

Major investors have yet to sign on, leaving a $ 38 billion pledge from publicly traded SoftBank Group itself as the only large commitment, according to the sources. And the size of that pledge may itself be in doubt given some of the recent investment­setbacks it has suffered and the lack of available cash on its balance sheet, according to a Reuters analysis.

Vision Fund and SoftBank Group declined to comment on the progress of Vision Fund 2.

The implosion in the valuation of WeWork and questions about its business model have dented Son’s reputation as a savvy investor and point to a big writedown by the first Vision Fund. SoftBank and the Vision Fundtogeth­er poured more than $10 billion into the company, investing some of that at a valuation of $47 billion in January. But WeWork recently abandoned plans for an initial public offering that would have pegged the company’s worth at just $10-12 billion.

If the second fund comes in well short of Son’s goal or gets scrapped it will have broad implicatio­ns for Silicon Valley venture capitalist­s, entreprene­urs andWallStr­eet financiers.

The first Vision Fund, which raised $97 billion, upended the tech investing world with massive bets on fast-growing but unproven companies. It was bigger than the aggregate amount raised by the entire US venture capital industry in 2018, giving Son a massive influence over the start-up market.

Sceptics say the troubles at WeWork and the poor public market performanc­e of moneylosin­g companies such as Uber Technologi­es Inc. and Slack Technologi­es Inc. will trigger a big decline in the value of numerous so-called “unicorn” startups worth more than a billion dollars.

 ?? BLOOMBERG FILE ?? Masayoshi Son.
BLOOMBERG FILE Masayoshi Son.

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