Adam Jeffery | CNBC Masayoshi Son, CEO of SoftBank. _________________________________
Japanese tech giant SoftBank has been plowing billions of dollars into tech companies, both public and privately held, in the last year -- so much so that one investor has questioned whether SoftBank is fueling a new valuation bubble in tech.
Some of these investments are coming from the gigantic SoftBank Vision Fund, which includes funds from SoftBank as well as Saudi Arabia's sovereign wealth fund and tech companies like Apple, Foxconn, Qualcomm and Sharp. The fund announced in May that it had closed $93 billion in capital, and hopes to raise $100 billion by the end of the year.
But SoftBank has also announced many investments that don't involve the Vision Fund. According to reports and sources familiar, some of these investments will be offered to the Vision Fund, while others will not.
Here's a partial list:
Vision Fund investments:
Brain Corp, an AI company working on tech for self-driving robots, received a $114 million investment from the Vision Fund in July.
Plenty, specializing in vertical farming, landed $200 million from the Vision Fund in July.
SoftBank investments that are expected to be offered to the Vision Fund
Nauto – A softbank SoftBank and GM led a $159 million investment in self-driving car start-up Nauto in June, and Softbank is expected to offer its portion of this investment to the Vision Fund.
Nvidia – SoftBank invested $4 billion in graphics chip-maker Nvidiain May, and is expected to offer this investment to the Vision Fund.
Improbable – SoftBank led a $500 million investment into this UK virtual reality start-up in May, and is expected to offer its portion of this investment to the Vision Fund.
Guardant Health – SoftBank led a $360 million investment in this cancer-detection start-up in May, and is expected to offer its portion of this investment to the Vision Fund.
OSlsoft – SoftBank announced an investment in industrial software maker OSIsoft in May, and is expected to
this investment to the Vision Fund. The amount of the investment was not disclosed, but Reuters reported it to be in the "hundreds of millions of dollars."
OneWeb – SoftBank invested $1 billion in this satellite-based Internet provider last December, but is expected to offer this investment to the Vision Fund.
SoFi – SoftBank led a $1 billion investment in online personal finance company and lending start-up SoFi in 2015, and is expected to offer its portion of this investment to the Vision Fund.
SoftBank investments that are not currently expected to be offered to the Vision Fund
WeWork – SoftBank announced in July that it was participating in a complicated $500 million investment that will create a Chinese subsidiary of the U.S. workspace-sharing start-up.
Boston Dynamics – In June, SoftBank bought this robotics start-up that was previously a division of Google holding company Alphabet. SoftBank has not disclosed intentions to transfer to the Vision Fund.
FILE PHOTO: The logo of SoftBank Group Corp is displayed at SoftBank World 2017 conference in Tokyo, Japan, July 20, 2017.Issei Kato/File photo ______________________________________
NEW YORK (Reuters) - Kabbage Inc, a U.S. online lender for small businesses, said on Thursday it had raised $250 million in equity funding from SoftBank Group Corp ( 9984.T), the latest fintech investment by the Japanese technology conglomerate.
That is the largest equity investment in such lenders outside of China so far, according to data provider CB Insights.
The Atlanta-based startup, which operates in North America and Europe, will use the cash to add lending products and other types of financial services, it said in a statement.
Kabbage plans to launch in Asia within the next 18 months, co-founder and Chief Executive Rob Frohwein said in an interview. "We believe that our system can be deployed rapidly on an international basis."
He declined to disclose Kabbage's new financial services.
Kabbage is among a group of young companies that use digital technologies to lower lending costs and offer credit faster than brick-and-mortar institutions.
Founded in 2009, Kabbage sells its technology to large banks to provide credit online, and has provided nearly $3.5 billion in funding to small businesses. Its technology powers automated lending for banks Banco Santander SA ( SAN.MC), ING Groep NV ( INGA.AS) and Scotiabank ( BNS.TO).
SoftBank, led by Chief Executive Masayoshi Son, has become a prolific global investor in technology startups. In 2015 it invested $1 billion in San Francisco-based online student lender Social Finance, known as SoFi.
While online lending is expanding, the sector has faced growing pains, including softer institutional investor demand due to concerns about loan quality.
This has made it harder for such lenders to raise funding, leading analysts and market participants to suggest the sector might be headed for consolidation.
In March Reuters reported that Kabbage was looking to raise a new round of equity funding for potential consolidation, with listed competitor On Deck being one of its acquisition targets.
Kabbage has no "specific plan" to buy On Deck, Frohwein said. "We look at all sorts of opportunities, but it needs to be in spaces that are not similar or overlapping with what we do."
Reporting by Anna Irrera; Editing by Richard Chang
Miguel McKelvey and Adam Neumann discuss WeWork at IGNITION 2016. Business Insider ___________________________________________________
WeWork has raised $4.4 billion in funding from SoftBank Group and SoftBank Vision Fund, the office sharing startup announced Thursday.
SoftBank is investing $3 billion in WeWork itself, and putting another $1.4 billion into three new WeWork subsidiaries — WeWork China, WeWork Japan, and WeWork Pacific.
As part of the investments, SoftBank will is naming two directors to WeWork's board: Ronald D. Fisher, a director of SoftBank Group; and Mark Schwartz, an external director of SoftBank Group.
Earlier this year, the Wall Street Journal reported that WeWork raised $300 million from SoftBank with plans to raise a total of $3 billion. Then, in early July, Bloomberg reported that WeWork had gotten another $760 million. At the end of July, WeWork secured an extra $500 million from SoftBank. Thursday's announcement includes the previous investments.
WeWork leases out large blocks of space in commercial buildings and then subleases them to smaller companies, frequently tech startups. The new-age real estate firm was valued at $21 billion in July, making it the fifth highest-valued startup in the world.
SoftBank's investment represents one of the first made by its new $100 billion tech-focused Vision Fund, which was announced last October and is being described as the largest fund of its kind in the world.
Remember the 1980s movie Brewster’s Millions, in which a minor league baseball pitcher (played by Richard Pryor) must spend $30 million in 30 days to inherit $300 million? Pryor goes on an epic spending spree for a bigger payoff down the road.
One of the world’s biggest public companies is making that film look like a weekend in the Hamptons. Japan’s SoftBank Group, led by its indefatigable CEO Masayoshi Son, is shooting to invest $100 billion over the next five years toward what the company calls the information revolution.
The newly-created SoftBank Vision Fund, with a handful of key investors, appears ready to almost single-handedly hack the technology revolution. Announced only last year, the fund had its first major close in May with $93 billion in committed capital. The rest of the money is expected to be raised this year.
The fund is unprecedented. Data firm CB Insights notes that the SoftBank Vision Fund, if and when it hits the $100 billion mark, will equal the total amount that VC-backed companies received in all of 2016—$100.8 billion across 8,372 deals globally.
The money will go toward both billion-dollar corporations and startups, with a minimum $100 million buy-in. The focus is on core technologies like artificial intelligence, robotics and the Internet of Things.
Aside from being Japan’s richest man, Son is also a futurist who has predicted the singularity, the moment in time when machines will become smarter than humans and technology will progress exponentially. Son pegs the date as 2047. He appears to be hedging that bet in the biggest way possible.
Show Me the Money
Ostensibly a telecommunications company, SoftBank Group was founded in 1981 and started investing in internet technologies by the mid-1990s. Son infamously lost about $70 billion of his own fortune after the dot-com bubble burst around 2001. The company itself has a market cap of nearly $90 billion today, about half of where it was during the heydays of the internet boom.
The ups and downs did nothing to slake the company’s thirst for technology. It has made nine acquisitions and more than 130 investments since 1995. In 2017 alone, SoftBank has poured billions into nearly 30 companies and acquired three others. Some of those investments are being transferred to the massive SoftBank Vision Fund.
SoftBank is not going it alone with the new fund. More than half of the money—$60 billion—comes via the Middle East through Saudi Arabia’s Public Investment Fund ($45 billion) and Abu Dhabi’s Mubadala Investment Company ($15 billion). Other players at the table include Apple, Qualcomm, Sharp, Foxconn, and Oracle.
During a company conference in August, Son notes the SoftBank Vision Fund is not just about making money. “We don’t just want to be an investor just for the money game,” he says through a translator. “We want to make the information revolution. To do the information revolution, you can’t do it by yourself; you need a lot of synergy.”
Off to the Races
The fund has wasted little time creating that synergy. In July, its first official investment, not surprisingly, went to a company that specializes in artificial intelligence for robots— Brain Corp. The San Diego-based startup uses AI to turn manual machines into self-driving robots that navigate their environments autonomously. The first commercial application appears to be a really smart commercial-grade version that crosses a Roomba and Zamboni.
A second investment in July was a bit more surprising. SoftBank and its fund partners led a $200 million mega-round for Plenty, an agricultural tech company that promises to reshape farming by going vertical. Using IoT sensors and machine learning, Plenty claims its urban vertical farms can produce 350 times more vegetables than a conventional farm using 1 percent of the water.
The spending spree continued into August.
The SoftBank Vision Fund led a $1.1 billion investment into a little-known biotechnology company called Roivant Sciences that goes dumpster diving for abandoned drugs and then creates subsidiaries around each therapy. For example, Axovant Sciences is devoted to neurology while Urovant focuses on urology. TechCrunch reports that Roivant is also creating a tech-focused subsidiary, called Datavant, that will use AI for drug discovery and other healthcare initiatives, such as designing clinical trials.
The AI angle may partly explain SoftBank’s interest in backing the biggest private placement in healthcare to date.
Also in August, SoftBank Vision Fund led a mix of $2.5 billion in primary and secondary capital investments into India’s largest private company in what was touted as the largest single investment in a private Indian company. Flipkart is an e-commerce company in the mold of Amazon.
The fund tacked on a $250 million investment round in August to Kabbage, an Atlanta-based startup in the alt-lending sector for small businesses. It ended big with a $4.4 billion investment into a co-working company called WeWork.
Betterment of Humanity
And those investments only include companies that SoftBank Vision Fund has backed directly.
SoftBank the company will offer—or has already turned over—previous investments to the Vision Fund in more than a half-dozen companies. Those assets include its shares in Nvidia, which produces chips for AI applications, and its first serious foray into autonomous driving with Nauto, a California startup that uses AI and high-tech cameras to retrofit vehicles to improve driving safety. The more miles the AI logs, the more it learns about safe and unsafe driving behaviors.
Other recent acquisitions, such as Boston Dynamics, a well-known US robotics company owned briefly by Google’s parent company Alphabet, will remain under the SoftBank Group umbrella for now.
This spending spree begs the question: What is the overall vision behind the SoftBank’s relentless pursuit of technology companies? A spokesperson for SoftBank told Singularity Hub that the “common thread among all of these companies is that they are creating the foundational platforms for the next stage of the information revolution.All of the companies, he adds, share SoftBank’s criteria of working toward “the betterment of humanity.”
While the SoftBank portfolio is diverse, from agtech to fintech to biotech, it’s obvious that SoftBank is betting on technologies that will connect the world in new and amazing ways. For instance, it wrote a $1 billion check last year in support of OneWeb, which aims to launch 900 satellites to bring internet to everyone on the planet. (It will also be turned over to the SoftBank Vision Fund.)
SoftBank also led a half-billion equity investment round earlier this year in a UK company called Improbable, which employs cloud-based distributed computing to create virtual worlds for gaming. The next step for the company is massive simulations of the real world that supports simultaneous users who can experience the same environment together(and another candidate for the SoftBank Vision Fund.)
Even something as seemingly low-tech as WeWork, which provides a desk or office in locations around the world, points toward a more connected planet.
In the end, the singularity is about bringing humanity together through technology. No one said it would be easy—or cheap.
FILE PHOTO: The logo of SoftBank Group Corp is displayed at SoftBank World 2017 conference in Tokyo, Japan, July 20, 2017. REUTERS/Issei Kato/File photo _______________________________________
New York (Reuters) - Sports e-commerce firm Fanatics has closed a $1 billion funding round led by SoftBank Group Corp’s Vision fund, which will give it the firepower to expand internationally, Chief Executive Doug Mack told Reuters.
The new funding will value the Jacksonville, Florida-based company that runs online sales for the National Basketball Association and the National Football League at $4.5 billion - more than twice the $2 billion in revenue expected this year, the company said.
The majority of Fanatics’ business is in the United States where it licenses merchandise and handles e-commerce sales for items such as sports jerseys for teams.
It is hoping to expand its revenue in international markets by leveraging SoftBank’s expertise in Asia, Mack said in an interview on Tuesday. Fanatics, which handles online sales for football clubs Manchester United and Real Madrid, currently gains about 10 percent of its sales internationally.
“It will definitely grow many-fold from there,” Mack said, referring to international sales. “We’ve only scratched the surface of the global opportunity. Soccer is the world’s No. 1 sport, and then there’s cricket. You’ll see us extend our rights to international leagues.”
SoftBank, run by Japanese billionaire Masayoshi Son, is making the bulk of its investment in Fanatics out of its $93 billion Vision Fund, the world’s biggest private equity fund, SoftBank confirmed the funding.
While the majority of the $1 billion in funding comes from SoftBank, the National Football League and Major League Baseball also participated.
SoftBank was introduced to Fanatics by Michael Rubin, the company’s executive chairman who previously founded GSI Commerce, a company that attracted an $100 million investment from SoftBank before it was sold to eBay for $2.4 billion.
Fanatics is also looking to hire more engineers, data scientists and designers with the cash.
Mack said one of the firm’s strengths lay with its technology that allows it to manufacture clothing very quickly.
When Fanatics wanted to raise money for victims of the devastating Hurricane Harvey, it created a “Houston Strong” line of clothing featuring all of the city’s local sports teams. It took less than three days to design the shirts, get permission from the sports teams and start shipping, Mack said.
An initial public offering or sale isn’t on the horizon, Mack said, although the company has been spending on deals. In April, it acquired VF Corporation’s sports licensing group, which owns the Majestic sportswear brand, for $225 million.
Reporting by Liana B. Baker in New York; Editing by Edwina Gibbs
The deal could give Japan's Softbank as much as a 22% stake in the ride-hailing company if it is able to carry out the full investment, which would entail purchasing shares directly from the company as well as from existing shareholders looking to cash out, the report said.
Uber was last valued at $69 billion. But according to the WSJ report, Softbank is trying to convince shareholder to agree to an auction process that would price Uber shares at a discount and value the company at $50 billion.
Softbank declined to comment to Business Insider. Uber did not immediately return requests for comment.
The tumultuous management changes have been accompanied by bitter infighting among different factions of company insiders and investors. Benchmark Capital, one of Uber's largest investors, sued Kalanick in August, alleging that the Uber cofounder fraudulently obtain control of three company board seats. The lawsuit provoked a bizarre declaration of war from another high-profile Uber investor, who vowed to strike back at the "unholy alliance" of "sanctimonious hypocrites."
A deal with Softbank would mark Khosrowshahi's first major action since taking the reins. Negotiations began before Khosrowshahi was hired and could conclude as early as next week the WSJ reported citing an anonymous source.
Slack valued at $5bn after SoftBank joins fundraising
Workplace messaging app draws further $250m as private money buoys tech start-ups
by Richard Waters in San Francisco Financial Times September 17, 2017
Workplace messaging app Slack has been valued at $5.1bn in its latest fundraising, which drew $250m from investors as the weight of cash in private markets continues to push up the valuations of the fastest-growing tech companies.
The latest investment, much of which came from Softbank’s giant Vision Fund, has lifted Slack’s total fundraising to $841m, making it one of the best-financed business software start-ups.
SoftBank has been under pressure to find homes big enough for its $100bn fund. Stewart Butterfield, the chief executive of Slack, said the fund had wanted to invest more and was likely to remain an investor well beyond an eventual initial public offering.
The investment has pushed Slack’s valuation to $5.1bn, including the cash raised, compared with $3.8bn at the time of its last funding in April last year.
Slack is growing at an annual rate of more than 100 per cent, Mr Butterfield said, and last week it reported it had hit $200m in annual recurring revenue, the most widely used measure for cloud-based software companies. That is double the revenue threshold at which tech companies have traditionally tapped the stock market.
“It’s a strange world. If it was 10 years ago we’d be public by now,” Mr Butterfield said. Slack has added to its cash holdings even though it still has not tapped any of the money raised in its two previous rounds, which totalled $360m, he added.
It’s a strange world. If it was 10 years ago we’d be public by nowStewart Butterfield, the chief executive of SlackBesides building its reserves in case the markets turn down, Slack took the latest investment in part with an eye to its business in Japan, already its third biggest market. SoftBank has “a lot of credibility” there as Slack prepares to launch a local language version of its service early next year, Mr Butterfield said.
Slack is destined for an IPO eventually, he said, though he predicted “with almost perfect certainty” that it would not happen until after 2018.
In one sign of the stock market’s hunger for more tech IPOs, venture capital investor Social Capital last week raised $600m for a so-called “blank check” company — vehicles that raise funds and then work out where to invest. The vehicle is designed to ease the path of start-ups to Wall Street. But some observers questioned whether it would make the transition any easier because companies would still face the same pressures once they are public.
A big reason for not going public is the risk that as a young company, Slack would not meet its business targets over the next year, said Mr Butterfield. That would “make it a rocky ride in the public market”.
The funding round comes as Slack races to stay ahead of Microsoft, which launched its “Slack killer” last year. Microsoft last week added an important feature to its service, called Teams, with a way for people other than employees to join in a company’s group chats.
Slack, which has had a similar feature for some time, went a step further last week with the first group chats designed to reach across company boundaries. This would tap inter-company “network effects” for the first time and will go down as one of the company’s biggest steps, according to Mr Butterfield.
“I think we probably have a year or, at the outside a year and a half, before it’s really competitive,” he said of Microsoft’s attack on Slack’s market. “It’s early in their evolution but I would never discount Microsoft’s ability to put resources behind it.”
T-Mobile, Sprint in merger talks: Sources 5 Hours Ago | 04:43 __________________________________
T-Mobile and Sprint are in active talks about a merger, according to people close to the situation.
Both companies and their parents, Deutsche Telekom and Softbank, have been in frequent conversations about a stock-for-stock merger in which T-Mobile parent Deutsche Telekom would emerge as the majority owner.
People close to the situation stress that negotiators are still weeks away from finalizing a deal and believe the chances of reaching an agreement are not assured. The two sides have not yet set an exchange ratio for a deal, but are currently engaged in talks to hammer out a term sheet.
The companies declined to comment on the report.
T-Mobile and Sprint have had a seemingly endless dalliance over the years since Softbank took control of Sprint, pushed by the prospect of billions of dollars in cost synergies that a merger would bring. The last time the two companies held meaningful talks earlier this year, Softbank's Masayoshi Son indicated a willingness to sell Sprint to T-Mobile.
This time, given the all-stock nature contemplated, Softbank would emerge as a large minority holder in any combination. While T-Mobile CEO John Legere is expected to lead any combination that results from a merger, Son has made it clear he wants a say in how the company is run. That desire adds another layer of complexity to an already difficult transaction.
T-Mobile has not begun due diligence on Sprint, yet another step that could change current price expectations or the willingness to move forward.
The biggest issue is whether any merger between the No. 3 and No. 4 wireless carriers in the nation would be approved by antitrust regulators. The risk of rejection by the Department of Justice will play an important role in the final decision made by both sides as to whether they will proceed with a deal.
Given Softbank's high level of engagement on a Sprint-T-Mobile deal, its quixotic campaign to try to buy Charter Communications has slowed considerably. The effort is on hold. CNBC has reported it involved the creation of a new company infused with vast amounts of equity and debt to buy Charter at a premium and the 17 percent of Sprint that Softbank does not own. Dutch telecom company Altice has been actively soliciting funds to mount its own bid for Charter should Softbank make a move.