‘Accelerate the future’:
The biggest force in Miami tech may be a conglomerate in Japan
MANY MIAMI-AREA RESIDENTS MAY NOT BE AWARE OF THE INFLUENCE THAT JAPAN-BASED TECH CONGLOMERATE SOFTBANK HAS OVER THE REGION’S INNOVATION ECONOMY. THE LIST OF COMPANIES IT HAS A STAKE IN WITH A MIAMI PRESENCE IS EXTENSIVE, INCLUDING UBER, WEWORK, REEF, UNIVISION, AND BRIGHTLINE.
How globalized is Miami today? A Japanese technology conglomerate is now one of the most important players in the city’s innovation economy.
SoftBank — which is not a bank but rather a technologyfocused investment group (“soft” refers to software) — owns stakes in many of the firms that make Miami’s advanced economy run, including:
DoorDash, the food delivery firm
REEF, the Miami-based ghost kitchen company valued at more than $1 billion
Uber, which now aims to have 70 employees in its Miami office
WeWork, the co-working space giant
Until recently, SoftBank’s startup investment strategy played only an incidental role in the city’s growth. But with the announcement of its $100 million Miami initiative in February, the launch of the Miamibased Opportunity Fund focused on supporting female and minority entrepreneurs, and the creation of two academic programs aimed at teaching Miamians advanced skills, SoftBank has signaled its interest in playing a much more active role in the local economy.
“In many ways, I think the value of SoftBank’s presence in Miami in incalculable; they’ve been an indispensable partner behind the Miami Movement,” Miami Mayor Francis Suarez said in a statement. ”You can’t calculate the impact SoftBank has had in shaping Miami’s newly evolving culture as an innovation hub.”
SoftBank’s largest local direct investment, at more than $1 billion, has been in REEF, whose ghost kitchens and neighborhood hubs have begun dotting greater Miami’s landscape. In August, REEF announced its intention to hire 1,000 workers in the Miami area.
The investment is of a piece with SoftBank’s overall strategy: betting on startups that are reshaping the way people live. SoftBank’s initial presence in Miami may have been tied to a personal quirk: Marcelo Claure, the CEO of SoftBank International, maintained personal and business ties here. But now, SoftBank sees the growth in Miami as part of its investment in the long term.
“If you had to simplify SoftBank in one sentence, it’s: We invest in the future,” said Miami-based SoftBank International managing partner Shu Nyatta in an interview. “And we try to play a hand in creating that, not just, ‘Here’s money’ — we actually try to help accelerate the future. And in that sense, the overlap with what Miami is doing right now is very, very strong. It’s kind of a very SoftBank vibe happening here.”
MIAMI INAUGURATION
SoftBank’s official presence in Miami was inaugurated in 2018, when Claure, fresh off his tenure as CEO of Sprint, moved back to the city where he had originally launched his career as co-founder of wireless group Brightstar.
It was Claure who helped tilt SoftBank to decide to seat its $5 billion Latin America investment fund, its second major dedicated investment fund after its marquee, $100 billion Vision Fund, in Miami.
“It was important that [Claure] recognized not only the opportunity in Latin America, but Miami itself, as a platform to access innovation in the hemisphere,” said James Kohnstamm, senior vice president at the Beacon Council. “They could have located in Mexico or São Paolo, but Claure and his team knew Miami was the right place because of its position as platform to the Americas.”
Claure was not available for comment.
In December 2018, SoftBank turned a small but ambitious Miami-based outfit called ParkJockey into an overnight unicorn (meaning a firm worth more than $1 billion) when it invested hundreds of millions of dollars in the business while simultaneously merging it with two of the largest parking operators in North America. It was part of a strategy to own real estate that could be used to stage Uber, Lyft, and DoorDash drivers making deliveries of food, goods, and passengers. Within a matter of months, the new company had changed its name to REEF to reflect its goal of serving as a hub for different components of an ecosystem.
LOCAL HEAVYWEIGHT
By October 2020, SoftBank had amassed 60 employees in its Miami office, or about 40% of all its U.S. based employees. For a while, there was also talk of SoftBank adding an office as part of an Inter Miami stadium deal with the city. That concept likely came to an end Friday with the announcement that Claure and SoftBank founder and CEO Masayoshi Son had sold their stakes in the soccer team to Jorge Mas and David Beckham.
For a city that for many years lacked a heavyweight venture capital firm that was willing to invest in its own backyard, Miami suddenly finding itself connected to SoftBank appeared to be a boon, although the firm would go another couple of years before announcing its next investment in Miami-based firms.
Then, the Miami tech
moment kicked off in December 2020 — and within a matter of months, SoftBank had announced its $100 million initiative. It also doubled down on its REEF investment with a $700 million bet at the end of 2020.
“Having an investor with tons of capital such as SoftBank heavily investing and looking is a huge bonus for companies being started [in Miami],” said Kyle Stanford, senior analyst at tech research group Pitchbook. Many firms in cities like Miami, he said, often have to spend large amounts of time and resources in
New York or San Francisco to get late-stage capital.
“It’s a big bonus and great achievement for Miami to attract a big investor like SoftBank,” Stanford said.
PART OF MIAMI
Relying heavily on a single source of investment always comes with some risk, and Miami’s relationship with SoftBank may be no exception. In particular, the grip held by founder and CEO Son over the company occasionally prompts alarms.
In May, SoftBank’s first female director resigned after clashing with Son over governance issues. In a letter upon her resignation, Yuko Kawamoto, a business professor, said SoftBank “often races so quickly to execute Son’s ideas that the infrastructure isn’t always in place to handle them,” Bloomberg News reported.
“Sometimes, therefore, rules come after the decisions are made, and some might say the company has some weakness in that regard,” she wrote. Kawamoto could not immediately be reached for comment.
After hitting an all-time high of nearly $50 in February, SoftBank shares have seen their value slashed to about $32, as investors have grown concerned about the value of some of SoftBank’s larger holdings.
“I think SoftBank has basically become a black box,” Amir Anvarzadeh, senior strategist at Wall Street firm Asymetric Advisors, said in an interview last month with Bloomberg. “It’s impossible to know what the earnings are. ... We consider SoftBank as not being invest-able.”
Pitchbook’s Stanford is more sanguine, saying SoftBank’s startup investment strategy has recently placed a greater emphasis on making smaller bets in a more diverse portfolio.
One of those bets is Miami itself. SoftBank’s Miami initiative has been responsible for at least three local investments to date. It has also launched a Data Science for All program aimed at boosting advanced skills for Miami-area residents, and has created the SoftBank Operator School to teach startup leadership skills to Florida International, Miami Dade College, and University of Miami students.
“Miami isn’t about stepping in for a little bit and then leaving. We want to be part of it,” Nyatta said. “We’re excited about contributing.”
Rob Wile: 312-806-6565, @rjwile