Forget $108 billion target, SoftBank’s second Vision Fund could be this much smaller than first fund

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Updated: Dec 08, 2019 5:15 PM

Despite what happened to WeWork, Uber, Slack in their IPO bets, which left Son “embarrassed and flustered”, the venture capital czar has preferred sticking to his old vision.

Softbank had raised 2 billion dollars last month, to begin with, the fundraising for Vision Fund 2. (Image: Bloomberg)

Four months after SoftBank announced its second Vision Fund of $108 billion following capital commitments from investors, the global technology investor is facing a challenge in raising the ambitious amount. The new fund is likely to be significantly short of the $108-billion target after SoftBank’s investors including Saudi Arabia were unnerved due to the Japanese fund losing big bets on companies including WeWork, The Sunday Telegraph reported. In fact, the fund amount could be, as reported, 30 per cent smaller than the first Vision Fund by SoftBank. The size of Vision Fund 1 was $100 billion.

SoftBank had said it intends to invest $38 billion in the new fund while based on the MoUs from institutions such as Apple, Foxconn, Microsoft, Sumitomo Mitsui Banking Corporation, the Dai-Chi Life Insurance Company etc “the anticipated amount of capital to be contributed to the Fund has reached approximately USD 108 billion,” SoftBank had said in the release. 

However, despite what happened to WeWork, Uber, Slack in their IPO bets, which left Son “embarrassed and flustered” according to his comments to Nikkei Business magazine, the venture capital czar has preferred sticking to his old vision. In a panel with Alibaba’s Jack Ma on Friday Son stressed his belief in investing money based on “guts” and instinct. This was perhaps endorsed by Ma as well. “He probably has the biggest guts in the world on doing investment. Very few people in the world have that courage,” Ma said at the Tokyo Forum at the University of Tokyo.

Also read: Here’s one more way startups may raise funding as government likely to take this step soon

This is not the first time after WeWork IPO debacle that Son had backed his style of investment. During the Future Investment Initiative forum in Riyadh in October, this year Son had said “Of course we provide the growth capital but that money is available from many other sources. So we are providing the total stimulus for them (entrepreneurs) to grow much bigger (and) quicker.

The co-working company WeWork had raised overall nearly $11 billion from SoftBank and was likely to IPO at $47-billion valuation but it failed to deliver even at a reported valuation of just $20 billion. WeWork’s valuation had gone up from earlier $20 billion after SoftBank put invested $3 billion and $2 billion in WeWork in November last year and January this year. Softbank had raised $2 billion last month, to begin with, the fundraising for Vision Fund 2, as reported by Bloomberg. The investors for this round weren’t disclosed.

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