Caution startups: SoftBank may not remain among your biggest investors globally; here’s why

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Published: June 9, 2019 7:13:25 PM

SoftBank, which has backed world's leading startups including Uber, WeWork, DiDi, Grab, Slack and India's OYO, Paytm, PolicyBazaar, Delhivery etc., from its $100-billion Vision Fund, may not remain among the world's biggest startup investors.

SoftBank Group, japan SoftBank Group, Net profits for  SoftBank Group, Masayoshi Son, SoftBank Vision Fund, SoftBank Group stake in uberSoftBank has received tepid feedback for its second fund from few of the world’s biggest investors. (Reuters)

Japanese conglomerate SoftBank Group, which has backed world’s leading startups including Uber, WeWork, DiDi, Grab, Slack and India’s OYO, Paytm, PolicyBazaar, Delhivery etc., from its $100-billion Vision Fund, may not remain among the world’s biggest startup investors. While SoftBank had earlier claimed of getting active interest from investors to fund its second $100-billion Vision Fund, but now it is less likely to be a smooth ride.

SoftBank has received tepid feedback for its second fund from few of the world’s biggest investors including Canada Pension Plan Investment Board and Saudi Arabia’s sovereign wealth fund that “plan to make limited or no contributions,” The Wall Street Journal reported even as SoftBank replied it to be “misleading and even inaccurate.”

Apart from large investors, those with less expertise are reportedly concerned about the fund’s lack of transparency and governance, the WSJ said.

The existing Vision Fund, launched in October 2016, has already invested around $70 billion from $100-billion corpus so far, its Founder and CEO Masayoshi Son had told CNBC in March this year even as Son added that it is “too early” to plan for the second fund as “we (SoftBank) have to see how many more exciting opportunities come up with pace.”

Nonetheless, Son had said that there is already active interest from investors for its second fund. “…there is a lot of interest that I am receiving (from investors) that they would like to invest in our next investments,” he said. While he couldn’t talk about whether the fund size would still remain $100 billion but he admitted of getting “lot of inbound calls” from potential investors.

SoftBank is eyeing an IPO of the first Vision Fund, the WSJ had reported in May this year. The existing fund has made 80 investments and has exited from companies including Uber, Flipkart, Nvidia etc., as per deals tracker Crunchbase.

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