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From: Glenn Petersen9/3/2017 4:42:03 PM
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Japan’s SoftBank Is Investing Billions in the Technological Future

By Peter Rejcek
Aug 29, 2017

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.

Round Two

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.

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From: Glenn Petersen9/6/2017 9:38:54 PM
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Sports e-commerce firm Fanatics closes $1 billion funding round led by SoftBank

Liana B. Baker
September 6, 2017 / 6:26 AM

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

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From: Glenn Petersen9/14/2017 10:16:35 PM
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Japan's Softbank wants to invest $10 billion in Uber, but only if it gets a big discount

Alexei Oreskovic
Business Insider
September 14, 2017

Softbank chairman Masayoshi Son Koki Nagahama/Getty Images

Softbank is in talks with Uber about a massive $10 billion investment in the company, according to a report in the Wall Street Journal on Thursday.

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 talks come as Uber seeks to move past nearly a year of controversy and scandals that culminated in cofounder Travis Kalanick stepping down from the CEO job in June. Last month Uber hired Expedia CEO Dara Khosrowshahi to fill the CEO slot vacated by Kalanick.

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.

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From: Glenn Petersen9/17/2017 11:24:38 PM
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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.”

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From: Glenn Petersen9/19/2017 4:03:31 PM
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T-Mobile and Sprint are in active talks about a merger
  • T-Mobile and Sprint are in active talks about a merger, according to people close to the situation.
  • While T-Mobile CEO John Legere is expected to lead any combination that results from a merger, Softbank's Masayoshi Son has made it clear he wants a say in how the company is run.
David Faber | @DavidFaber
Published 5 Hours Ago | Updated 4 Hours Ago

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.

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From: Glenn Petersen9/20/2017 6:11:23 AM
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Meanwhile, billionaire Son of SoftBank, a multinational telecommunications and Internet firm based in Japan, predicts superintelligent robots will surpass humans in both number and brain power by 2047.

Can Futurists Predict the Year of the Singularity?

By Peter Rejcek
Singularity Hub
Mar 31, 2017

The end of the world as we know it is near. And that’s a good thing, according to many of the futurists who are predicting the imminent arrival of what’s been called the technological singularity.

The technological singularity is the idea that technological progress, particularly in artificial intelligence, will reach a tipping point to where machines are exponentially smarter than humans. It has been a hot topic of late.

Well-known futurist and Google engineer Ray Kurzweil (co-founder and chancellor of Singularity University) reiterated his bold prediction at Austin’s South by Southwest (SXSW) festival this month that machines will match human intelligence by 2029 (and has said previously the Singularity itself will occur by 2045). That’s two years before SoftBank CEO Masayoshi Son’s prediction of 2047, made at the Mobile World Congress (MWC) earlier this year.

Author of the seminal book on the topic, The Singularity Is Near, Kurzweil said during the SXSW festival that “what’s actually happening is [machines] are powering all of us. …They’re making us smarter. They may not yet be inside our bodies, but by the 2030s, we will connect our neocortex, the part of our brain where we do our thinking, to the cloud.”

That merger of man and machine—sometimes referred to as transhumanism—is the same concept that Tesla and SpaceX CEO Elon Musk talks about when discussing development of a neural lace. For Musk, however, an interface between the human brain and computers is vital to keep our species from becoming obsolete when the singularity hits.

Musk is also the driving force behind Open AI, a billion-dollar nonprofit dedicated to ensuring the development of artificial general intelligence (AGI) is beneficial to humanity. AGI is another term for human-level intelligence. What most people refer to as AI today is weak or narrow artificial intelligence—a machine capable of “thinking” within a very narrow range of concepts or tasks.

Futurist Ben Goertzel, who among his many roles is chief scientist at financial prediction firm Aidyia Holdings and robotics company Hanson Robotics (and advisor to Singularity University), believes AGI is possible well within Kurzweil’s timeframe. The singularity is harder to predict, he says on his personal website, estimating the date anywhere between 2020 and 2100.

“Note that we might achieve human-level AGI, radical health-span extension and other cool stuff well before a singularity—especially if we choose to throttle AGI development rate for a while in order to increase the odds of a beneficial singularity,” he writes.

Meanwhile, billionaire Son of SoftBank, a multinational telecommunications and Internet firm based in Japan, predicts superintelligent robots will surpass humans in both number and brain power by 2047.

He is putting a lot of money toward making it happen. The investment arm of SoftBank, for instance, recently bankrolled $100 million in a startup called CloudMinds for cloud-connected robots, transplanting the “brain” from the machine to the cloud. Son is also creating the world’s biggest tech venture capitalist fund to the tune of $100 billion.

“I truly believe it’s coming, that’s why I’m in a hurry—to aggregate the cash, to invest,” he was quoted as saying at the MWC.

History of prediction

Kurzweil, Son, Goertzel and others are just the latest generation of futurists who have observed that humanity is accelerating toward a new paradigm of existence, largely due to technological innovation.

There were some hints that philosophers as early as the 19th century, during the upheavals of the Industrial Revolution, recognized that the human race was a species fast-tracked for a different sort of reality. It wasn’t until the 1950s, however, when the modern-day understanding of the singularity first took form.

Mathematician John von Neumann had noted that “the ever-accelerating progress of technology … gives the appearance of approaching some essential singularity in the history of the race beyond which human affairs, as we know them, could not continue.”

In the 1960s, following his work with Alan Turing to decrypt Nazi communications, British mathematician I.J. Goode invoked the singularity without naming it as such.

He wrote, “Let an ultra-intelligent machine be defined as a machine that can far surpass all the intellectual activities of any man however clever. Since the design of machines is one of these intellectual activities, an ultra-intelligent machine could design even better machines; there would then unquestionably be an ‘intelligence explosion,’ and the intelligence of man would be left far behind.”

Science fiction writer and retired mathematics and computer science professor Vernor Vinge is usually credited with coining the term “technological singularity.” His 1993 essay, The Coming Technological Singularity: How to Survive in the Post-Human Era predicted the moment of technological transcendence would come within 30 years.

Vinge explains in his essay why he thinks the term “singularity”—in cosmology, the event where space-time collapses and a black hole forms—is apt: “It is a point where our models must be discarded and a new reality rules. As we move closer and closer to this point, it will loom vaster and vaster over human affairs till the notion becomes commonplace. Yet when it finally happens it may still be a great surprise and a greater unknown.”

Prediction an inexact scienceBut is predicting the singularity even possible?

A paper by Stuart Armstrong et al suggests such predictions are a best guess at most. A database compiled by the Machine Intelligence Research Institute (MIRI), a nonprofit dedicated to social issues related to AGI, found 257 AI predictions from the period 1950-2012 in the scientific literature. Of these, 95 contained predictions giving timelines for AI development.

“The AI predictions in the database seem little better than random guesses,” the authors write. For example, the researchers found that “there is no evidence that expert predictions differ from those of non-experts.” They also observed a strong pattern that showed most AI prognostications fell within a certain “sweet spot”—15 to 25 years from the moment of prediction.

Others have cast doubt that the singularity is achievable in the time frames put forth by Kurzweil and Son.

Paul Allen, co-founder of Microsoft and Institute of Artificial Intelligence, among other ventures, has written that such a technological leap forward is still far in the future.

“[I]f the singularity is to arrive by 2045, it will take unforeseeable and fundamentally unpredictable breakthroughs, and not because the Law of Accelerating Returns made it the inevitable result of a specific exponential rate of progress,” he writes, referring to the concept that past rates of progress can predict future rates as well.

Extinction or transcendence?

Futurist Nikola Danaylov, who manages the Singularity Weblog, says he believes a better question to ask is whether achieving the singularity is a good thing or a bad thing.

“Is that going to help us grow extinct like the dinosaurs or is it going to help us spread through the universe like Carl Sagan dreamed of?” he tells Singularity Hub. “Right now, it’s very unclear to me personally.”

Danaylov argues that the singularity orthodoxy of today largely ignores the societal upheavals already under way. The idea that “technology will save us” will not lift people out of poverty or extend human life if technological breakthroughs only benefit those with money, he says.

“I’m not convinced [the singularity is] going to happen in the way we think it’s going to happen,” he says. “I’m sure we’re missing the major implications, the major considerations.

“We have tremendous potential to make it a good thing,” he adds.

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From: Glenn Petersen9/22/2017 6:15:33 AM
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SoftBank’s $93 billion Vision Fund is the biggest of all time — and it’s not even close

Its size could also be a liability.

by Rani Molla @ranimolla
Sep 21, 2017, 2:00pm EDT

Photo by Kiyoshi Ota/Getty Images

SoftBank’s Vision Fund is a beast like no other. Backed by sovereign wealth funds and tech behemoths alike, it’s not just the largest tech fund ever — it’s the largest corporate venture capital fund ever, according to data from FactSet. It towers over what were formerly the biggest of these funds, raised by such names as Goldman Sachs and Blackstone.

And even more terrifying to Silicon Valley venture capital firms, SoftBank’s fund is focused on tech startups. Typical funds from Sand Hill firms barely register on the same scale as SoftBank’s $93 billion Vision Fund — VC funds usually top out in the millions or at most one-digit billions.

Here’s how it compares in size to the biggest funds historically, as well as to some major tech funds:

The size of SoftBank's fund has both intimidated and befuddled competing investors, who expect that the giant will have to cut massive, rapid deals in order to put the cash to work effectively, according to sources. Some worry that the pool will further inflate already overly high valuations of private tech companies. But other shareholders see it as an opportunity to sell their stakes earlier in companies that are taking longer and longer to deliver real cash.

But perhaps the relatively smaller size of Sand Hill’s venture capital funds is a blessing. SoftBank will have to allocate approximately $20 billion a year to dispense with its intended $100 billion fund in its five-year time frame. Smaller firms will likely have to be choosier about their investments.

For example, Benchmark’s fund that invested in Uber in 2011, when the company was worth only $60 million, raised $425 million for its entire fund — an amount smaller than single deals by SoftBank. Uber is now worth more than 1,000 times what it was during its series A funding. Funding later-stage investments or buyouts like SoftBank is doing is much more expensive, but won’t likely yield returns like that.

Theodore Schleifer contributed reporting.

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From: Glenn Petersen9/22/2017 8:16:32 PM
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This would be a huge deal for Softbank. Its 80% interest in Sprint is currently worth $27.2 billion, equal to 30.6% of Softbank's $88.9 billion market cap.

Exclusive: T-Mobile, Sprint close to agreeing on deal terms - sources

September 22, 2017 / 6:23 AM

(Reuters) - T-Mobile US Inc ( TMUS.O) is close to agreeing tentative terms on a deal to merge with Sprint Corp ( S.N), people familiar with the matter said on Friday, a major breakthrough in efforts to merge the third and fourth largest U.S. wireless carriers.

The transaction would significantly consolidate the U.S. telecommunications market and represent the first transformative U.S. merger with significant antitrust risk to be agreed since the inauguration of U.S. President Donald Trump in January.

The progress toward a deal also indicates that T-Mobile and Sprint believe that the U.S. antitrust enforcement environment has become more favorable since the companies abandoned their previous effort to combine in 2014 amid regulatory concerns.

The latest development in the talks between T-Mobile and Sprint comes as the telecommunications sector seeks ways to tackle investments in 5G technology that will greatly enhance wireless data transfer speeds.

Japan’s SoftBank Group Corp ( 9984.T), which controls Sprint, and other Sprint shareholders will own 40 to 50 percent of the combined company, while T-Mobile majority owner Deutsche Telekom ( DTEGn.DE) and the rest of T-Mobile shareholders will own the majority, the sources said.

SoftBank founder Masayoshi Son met with Trump late last year and said in February that the Japanese firm should benefit from Trump’s promised deregulation.

Once terms are finalized, due diligence by the two companies will follow and a deal is expected by the end of October, though talks may still fall through, the sources said.

A merger would create a business with more than 130 million subscribers, just behind Verizon Communications Inc ( VZ.N) and AT&T Inc ( T.N). Revenues would top $70 billion and analysts say there would be massive scope to cut costs.

Sprint shares were up 5 percent in afternoon trading in New York on Friday to $8.44, giving the company a market capitalization of close to $34 billion. T-Mobile shares were up 0.4 percent to $63.66, giving that company a market capitalization of around $53 billion.

The sources asked not to be identified because the negotiations are confidential. Sprint and Deutsche Telekom declined to comment. T-Mobile and SoftBank did not immediately respond to requests for comment.

SoftBank’s Son abandoned an earlier attempt to acquire T-Mobile for Sprint in 2014. Under that deal, SoftBank would have been in control of the merged company, with Deutsche Telekom becoming a minority shareholder.

Smartphones with the logos of T-Mobile and Sprint are seen in this illustration taken September 19, 2017. REUTERS/Dado Ruvic/Illustration

Since then, T-Mobile has outperformed Sprint under Chief Executive John Legere, who the sources said would lead the combined company.


Earlier this month, Federal Communications Commission Chairman Ajit Pai gave a potential boost to a tie-up when he recommended that the FCC find for the first since 2009 that there is “effective competition in the marketplace for mobile wireless services.”

The FCC is set to vote on Tuesday on the proposed annual report on the state of the wireless competition market required by U.S. Congress.

T-Mobile and Sprint will likely tout planned investments in 5G and their network that would create jobs, though combining operations would also lead to layoffs, said Roger Entner, an analyst at Recon Analytics.

“They will argue that the track record of T-Mobile and Sprint shows they are vigorous competitors and that this will not cease to be the case after the deal,” said Entner.

Son made headlines in early December when he appeared in the marble lobby of Trump Tower in New York alongside the president-elect, dressed in a red vest and red tie nearly identical to that of the tycoon turned commander in chief.

He was among the first in a series of Asian billionaires and leaders to pay a congratulatory visit to Trump, who won office in November on a platform that focused on national security and protecting U.S. jobs.

Son’s pledge to Trump to invest $50 billion in the United States and create 50,000 jobs was light on details but spoke to the president’s election promise to boost economic growth by making deals with individual companies, rather than through complicated trade deals.

Last month, Sprint CEO Marcelo Claure said an announcement on merger talks should come in the “near future.”

Sprint had approached cable company Charter Communications Inc ( CHTR.O) about a potential merger earlier this year, but quickly abandoned that effort.

AT&T is in the process of getting its own transformative deal, its $85.4 billion acquisition of media conglomerate Time Warner Inc ( TWX.N) approved by U.S. regulators.

Reporting by Greg Roumeliotis in New York and Arno Schuetze in Frankfurt; Additional reporting by Pamela Barbaglia in London, Douglas Busvine in Frankfurt, David Shepardson in Washington; Writing by Douglas Busvine; Editing by Bernadette Baum and Meredith Mazzilli

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From: Glenn Petersen9/24/2017 4:06:37 PM
   of 5783
SoftBank's Masayoshi Son breaks the mold of conservative Japanese investors
  • SoftBank has invested billions into tech companies in recent years
  • Its founder, Masayoshi Son, is placing bets on the future by investing in companies that are doing work in areas of Internet of Things, artificial intelligence and robotics
  • The Japanese tech titan is also invested in top players in proven industries such as e-commerce and ride-sharing

Saheli Roy Choudhury | @sahelirc
Published 3:02 AM ET Mon, 21 Aug 2017 Updated 12:29 AM ET Tue, 22 Aug 2017

SoftBank founder Masayoshi Son is not just the wealthiest man in Japan. He's not just a tech titan boasting billions of dollars worth of investments in some of the most important companies of our age.

Son is his country's lone mold-breaking entrepreneur.

Alessandro Di Ciommo | NurPhoto | Getty Images
SoftBank Group Corp. founder, Chairman and CEO Masayoshi Son.

Decision-makers in Japan are usually fiscally conservative, whereas under Son, SoftBank appears to be making regular multi-million dollar, or in some cases multi-billion dollar, investments into various companies — some of which are not directly related to SoftBank's core money-making businesses.

"He's doing something that is incredibly unique from the Japanese perspective," said Jesper Koll, head of Japan at WisdomTree. "It's sad to watch that he's the only Japanese entrepreneur who is creating the new frontier (in tech)."

While new technological advances have become a constant source of disruption for established corporations, smart companies are keeping up by either plowing money into research and development or into investments and acquisitions. SoftBank, with Son at the helm, is doing both.

Betting on the top players

SoftBank's core businesses are telecommunications — within Japan and through its controlling stake in Sprint — but it also draws in revenue from other technology businesses.

The Japanese tech giant has made a number of prominent investments recently, including last year's acquisition of U.K.-based chip maker ARM for $32 billion, a $4 billion stake in U.S. chip maker Nvidia this year, and a newly announced $2.5 billion boost to Indian e-commerce player Flipkart.

That last stake comes from the massive SoftBank-led Vision Fund while existing investments in Nvidia and ARM are expected to also be offered to the fund.

The Vision Fund includes capital from SoftBank, Saudi Arabia's sovereign wealth fund and tech firms Apple, Foxconn, Qualcomm and Sharp. In May, the fund announced it had closed $93 billion in capital and that it hopes to raise $100 billion by the end of the year.

Even beyond that, SoftBank also has many investments separate from the Vision Fund. For example, it acquired a controlling stake in U.S. telecommunications firm Sprint for about $36 billion between 2012 and 2013. Son was also an early investor in Yahoo and Alibaba, when the latter's valuation was below $100 million according to investors.

Dealogic data, which includes investments by the Vision Fund, showed that between 2012 and August of this year SoftBank announced 383 deals worth approximately $125.76 billion.

All those deals fall into one of two categories: cutting-edge technologies or tech companies that are already number one or number two in their category.

"They know if they consistently invest in capital leaders in a disruptive category, the upside is humongous," Hans Tung, managing partner at GGV Capital, told CNBC. He explained, "They're good at investing in ideas that're proven in a developed market, but they want to invest in local competitors that are number one in emerging markets."

For example, in the ride-hailing market, SoftBank is already invested in southeast Asia's top player, Grab, and India's leading local player, Ola. Recently, SoftBank said it would be interested in putting money into either Uber or Lyft, the leading ride-hailing players in the U.S.

Occasionally SoftBank invests in the number two company in a specific industry and then aims for a merger with the top player, said Tung. That was the case in China's leading ride-hailing player Didi Chuxing. The company formed from a merger between Didi Dache and SoftBank-backed Kuaidi Dache.

While telecommunications — both domestic and the Sprint business in the U.S. — constitutes a sizable portion of SoftBank's revenue, analysts say the company doesn't see itself as a telecom business.

"SoftBank does not consider themselves to be a telecom business but they like the cash flow and see it as a tool to advance their tech ambitions," Kirk Boodry, a Singapore-based analyst at New Street Research, told CNBC. He added that if SoftBank thinks wireless values are high, it might even sell the Sprint business.

"We think SoftBank wants to be represented across the value chain," said Boodry.

Planning ahead

Son, who founded SoftBank in the 1980s, has grand visions of what technological advancements the future holds. And he prefers to chart his course with mid-to-long term plans to achieve certain targets. At 19, the story goes, he created a 50-year life plan for his entrepreneurial ambition, setting himself targets for each decade to build up SoftBank into the tech giant that it is today. He also created a 300-year plan for it to continue growing as a corporation.

In 2010, Son presented a 30-year plan for the company, where the key theme was "Information Revolution" and the emphasis was on using new technologies to push the boundaries of science in areas like telepathic communications and increasing life expectancy to 200 years.

While those goals may still be far off from being realized, SoftBank's subsidiaries, as well as companies in which it's invested, are pushing the frontiers of technology in areas such as the "Internet of Things," artificial intelligence and deep learning.

Everett Rosenfeld | CNBC

For example, SoftBank Robotics created Pepper — a robot capable of reading emotions and interacting with human beings — and teamed up with Alibaba and Foxconn to bring it to global markets.

In July, SoftBank was part of a group of companies that invested $159 million into U.S. car technology start-up Nauto. The Palo Alto, California-based company makes cameras that can track driver behavior in real time and know if they are distracted.

Meanwhile, SoftBank also holds a stake in Chinese ride-hailing company Didi Chuxing, which is looking at artificial intelligence in security and intelligent driving technologies in a new research lab in Silicon Valley.

Given how rapidly technology is shaking up the industry, no one knows what the next business model is going to be — something, Son is trying to discover, Koll said.

That said, Son's ambition nearly came to an abrupt end during the dotcom bust in the early 2000s. A CNN report said he lost $70 billion in one day and admitted that 99 percent of his net worth was wiped out in 2000.

Funding its vision for the future

The massive Vision Fund, which was first announced in 2016, in part aims to realize Son's vision of the future. It makes long-term investments in companies operating in technology such as the "Internet of Things," artificial intelligence, robotics, mobile applications, consumer internet businesses and more. SoftBank has committed to invest $28 billion into the fund through a combination of equity in ARM and cash on hand.

SoftBank's Masa Son: Interested in Lyft or Uber 11:57 AM ET Mon, 7 Aug 2017 | 01:55

"Creation of the Vision Fund should be positive for SoftBank shareholders. It separates some of the risk from the investment program into a separate non-recourse entity," said Boodry.

But some investors have questioned whether SoftBank might be fueling a new valuation bubble in tech.

"In general, Son-san has a good investing track record so he should be do well," said Boodry.

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From: Glenn Petersen9/25/2017 3:57:12 PM
1 Recommendation   of 5783
The Link Between SoftBank, Alzheimer's and Data

By Giles Turner and Jared S Hopkins
September 25, 2017

Hi, it’s Giles from Europe, and Jared from our U.S. health team. We’re going to talk about SoftBank.

We know, We know. Enough already with SoftBank. But bear with us. Because this time it’s not about Uber or WeWork —it’s about how Alzheimer’s and data mining might give us an insight into SoftBank’s investment strategy.

At first glance, it seems as if the Japanese company doesn’t have an investment strategy for its $93 billion megafund. Its bets range from ride-hailing apps to robotics companies to instant messaging tools. This scattergun approach was underscored in late August when SoftBank led a $1.1 billion investment into pharmaceutical group Roivant Sciences Ltd. —one of the biggest-ever biotech investments.

Roivant, founded by ex-hedge-fund partner Vivek Ramaswamy, 32, analyzes data to hunt out unwanted and unapproved drug candidates, which it develops through a range of subsidiaries such as Axovant, which focuses on neurology, Myovant (women’s health and endocrine diseases), Enzyvant (rare diseases), and Urovant ( yep, urology).

It’s crunch time for Axovant right now. Investors and the medical community are waiting to see late-stage results for its experimental Alzheimer’s treatment intepirdine, due in late September.

No drug has yet proven to significantly slow Alzheimer’s and related dementia, which affect about 45 million people in the world. In the past year, experimental drugs from Merck & Co. and Eli Lilly & Co. have joined the dozens of failures aimed at blocking the disease or slowing its progress.

Axovant is currently trading at around $25 a share. If the trial is successful, analysts at Jefferies see the stock reaching $40 to $100 a share, potentially turning a $2.7 billion clinical-stage startup into a $10 billion company.

Not everyone agrees. The trial might fail, or work modestly, and not in a way that will be a commercial or clinical boon, according to Gbola Amusa, an analyst at Chardan Capital Markets who recommends selling the shares. Amusa said in an interview that he’s discouraged partly because similar drugs were unsuccessful and intepirdine’s mid-stage data showed modest benefit.

Wait. It gets more confusing.

The investment into Roivant was led by Akshay Naheta, managing director of SoftBank Group International. Naheta was previously a hedge-fund manager and value investor —meaning he looked for companies that traded for less than their intrinsic value.

So we have former fund manager who is an expert in value investing, not pharma, leading a $1 billion bet on pharma holding group —which may or may not have a lucrative subsidiary in a few weeks’ time.

Still, there’s one piece of the puzzle missing. SoftBank sees its investment into Roivant not as a bet on Axovant, but an investment into data mining within the pharma industry. On Wednesday, Roivant announced the formal launch of its latest subsidiary Datavant, which is using AI to sift through datasets to help get drugs through the clinical trial process. Datavant has already compiled data from 85 different datasets comprising more than 20 million patient visits.

Data is SoftBank’s current dreamboat. It has invested in companies such as graphics chipmaker Nvidia and bought U.K. chipmaker ARM Holdings to tap into the growing need of companies to manage an ever-increasing flow of data.

This is what SoftBank’s investment into Roivant is really about. Not only is there the potential of some immediate short turn upside with Axovant, but if that goes wrong SoftBank is betting that Datavant will keep feeding potential drugs for its other subsidiaries to push through the clinical trial process. It’s a sort of hedge. Like investing in a range of ride sharing apps to either pick the winner or perhaps one day merge them all, or investing in semiconductor companies that in the short term are a cash cow but perhaps later on will be essential to AI.

Yes, it still seems a bit nuts, and there is plenty of intelligent skeptisicm into Roivant’s strategy, but regardless of the industry, where there is data, you may find SoftBank.

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