SoftBank Vision Fund backs out of investment talks with Kushner’s Cadre

Jared Kushner. Photographer: Eric Thayer/Bloomberg

The SoftBank Vision Fund has walked away from talks to invest in Cadre, a real-estate technology startup owned partly by Jared Kushner, but other investors are offering to buy a stake, according to people familiar with the discussions.

One term sheet would value the firm at as much as $2 billion, two of the people said. That would be more than double an $800 million appraisal at the end of last year. Reema Bahnasy, a spokeswoman for Cadre, declined to identify that investor or provide any other information about the sensitive discussions.

Jared Kushner helped start the company with his brother, Josh, and a Harvard classmate, Ryan Williams, and has held onto his stake even after shedding certain other assets to avoid appearance problems as he became a senior adviser to his father-in-law, President Donald Trump.

Because Jared Kushner is overseeing Middle Eastern policy, the potential investment by the SoftBank Vision Fund drew attention. The fund, an investment arm of SoftBank Group Corp., derives much of its $100 billion war chest — one of the biggest in the world — from Saudi Arabia and the United Arab Emirates. Its headline deals have tended to be in the billions of dollars. The Cadre investment would have been small by comparison.

SoftBank, which declined to comment, was said to have been considering an investment of at least $100 million. Jared Kushner’s lawyer, Abbe Lowell, declined to comment but has said previously that Kushner was a “passive” investor in Cadre who didn’t take part in negotiations for the company.

Sovereign Funds

Almost half of the SoftBank Vision Fund comes from the Saudi government’s sovereign wealth fund, with another $15 billion coming from the United Arab Emirates. Jared Kushner has developed close relationships with leaders of both countries and has been supportive of their agendas.

Jared Kushner’s role as both a top government figure and a beneficiary of any investment deal with SoftBank posed potential conflicts of interest. One especially high-profile issue is the pending $58 billion merger of Sprint Corp. with T-Mobile US Inc., which requires the approval of Trump’s regulators. SoftBank is by far Sprint’s largest shareholder.

Cadre officials have said that Jared Kushner doesn’t play an active role in its operations. But he hasn’t divested his Cadre stake, valued at $5 million to $25 million on his most recent financial disclosure form. People close to Cadre said that neither Kushner had taken part in the recent funding discussions with SoftBank.

Jared Kushner also benefited from the April 2017 sale of rental properties in Queens, New York, that his family company, Kushner Cos., co-owned and managed. His financial disclosure shows he received as much as $6 million from the transaction. Although Cadre is a co-owner of several properties operated by different management companies, as of March, the Queens properties were the only ones it had sold. The sale was lucrative in part because the number of rent-regulated tenants had been reduced sharply under the Kushners’ control.

Puck Building

Cadre’s offices are in the Puck Building in downtown Manhattan, which the Kushners have owned since the 1980s. The building also houses Thrive Capital, Josh Kushner’s separate venture capital firm, which provided early investment in Cadre. In an interview with Bloomberg News last year, Williams, the company’s CEO, said he consults at least once a week with Josh Kushner, who has a seat on the board.

Cadre is an online real estate marketplace, currently available only for a wealthy client base, though Williams, a Goldman Sachs Group Inc. and Blackstone LP alumnus, said at a conference last month that he plans to open it up more widely soon.

In January, Cadre secured $250 million from Goldman’s private-wealth clients. It has now closed more than a dozen deals, with an average offering size of $30 million of equity. The company’s backers include the venture capital firms Andreessen Horowitz and General Catalyst.

The Vision Fund is one of the world’s largest investment funds, with stakes in more than 30 companies, including WeWork Cos. and Uber Technologies Inc. Early this year, SoftBank said it might invest in as many as 100 companies, at a minimum of $100 million each. SoftBank Chief Executive Officer Masayoshi Son said last week that a second Vision Fund would soon follow, to include many of the investors and institutions in the original.

Bloomberg

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Following vacancies can be applied for (only in Singapore).   

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Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.