|$100 billion is not enough — SoftBank is in talks to raise a second giant tech fund|
Can CEO Masayoshi Son tap an even bigger mountain of money?
by Theodore Schleifer and Kara Swisher
Oct 16, 2017, 9:38pm EDT
More money for Masa! Photo by Koki Nagahama/Getty Images
SoftBank — the Japanese conglomerate that is already upending Silicon Valley finance with its existing $93 billion Vision Fund — is in early planning discussions to raise a second and possibly larger fund, multiple sources tell Recode.
SoftBank CEO Masayoshi Son wants to raise a supplemental technology investing pool that would compliment the massive Vision Fund, according to these sources, which has made bold and sometimes controversial investments across the tech sector over the last year.
The plans to do so are still in the early stages. “It’s conceptual, but serious,” said one person close to the situation.
But Son has said publicly that tech is in another major period of upheaval and change and that those who make major investments in new technologies — like automation and artificial intelligence — now will reap the biggest rewards later.
It’s also unclear who would be investing in the new fund and how large it will be, although some sources said it could be substantially larger than current Vision Fund.
Current backers of the investment vehicle, which includes the sovereign wealth funds of Saudi Arabia and the United Arab Emirates, could invest in the new fund too. And there are many more wealth funds from foreign countries eager to gain access to shares in high-flying U.S. tech companies to draw from.
The second fund will certainly elicit even more questions about the ambitions of SoftBank and its Vision Fund, which has both awed and befuddled Silicon Valley financiers with its twelve-figure mountain of cash. Typically, venture funds raise new cash from their limited partners every two to three years to deploy new investments.
But SoftBank’s fund is different in its aggressiveness, speed and size. So far, it has acquired stakes in some of Silicon Valley’s flashiest companies such as Slack and WeWork, but has drawn criticism for its short due-diligence process and willingness to drastically outbid rival investors.
The Vision Fund is on track to part with tens of billions of its cash so far, assuming that a complex secondary purchase of about $10 billion in existing shares of Uber succeeds in the weeks ahead. Sources said the tender offer for shares of the troubled car-hailing company will take place once a deal is signed with Uber’s board, which could happen soon.
And SoftBank has yet to even close the Vision Fund, which is led by London-based Rajeev Misra. It announced a partial close on $93 billion of an intended $100 billion earlier this spring, but it has been slow to unveil the final $7 billion in capital commitments.
The Vision Fund is also in the process of making several senior-level hires, including a vice president of business operations, according to posted job listings. It has already hired former LinkedIn exec Deep Nishar and former Shutterfly CEO Jeff Housenbold.
A spokesperson for SoftBank declined to comment.