SoftBank Group Corp.’s $100 billion technology fund, Softbank Vision Fund, is on track to closing by the end of January, and has attracted investments from the sovereign wealth funds of Abu Dhabi and Saudi Arabia, the family office of Oracle Corp. founder Larry Ellison, Apple Inc., Foxconn Technology Group Ltd, and Qualcomm Inc., a spokesperson for the Japanese company said.
Saudi Arabia will invest $45 billion in the fund and Softbank itself, which will be both a general partner and managing partner of the fund, $28 billion. Apple is investing $1 billion in the fund, The Wall Street Journal reported. The Financial Times put the size of Saudi Arabia’s investment at $45 billion.
All future investments from SoftBank, including in its solar energy joint venture in India with the Bharti group, and potential follow-on investments in its portfolio companies such as ANI Technologies Pvt. Ltd (which runs cab aggregator Ola), and Jasper Infotech Pvt. Ltd (which runs e-commerce marketplace Snapdeal), will come from the fund, which a person briefed on the matter described as the biggest fund of its kind on the planet.
Structured more like a private equity fund than a venture fund in terms of its size and investment horizon, the London-based SoftBank Vision Fund will have a 14-year life and a five-year investment period. It is headed by Rajeev Misra, who joined SoftBank Group as head of strategic finance in late 2014.
The person briefed on the matter added that the fund will invest in next-generation technology companies across sectors. Robotics, the Internet of Things, big data, machine learning and cognitive computing will all be part of the fund’s technology focus. This person the fund will not make early-stage investments, preferring to invest in later rounds (so-called Series C and Series D rounds), and putting in at least a few hundred million to up to a few billion dollars in each investment. It could even invest in public companies or help take public companies private. And it would not have any geographical constraints, this person added, asking not to be identified.
A spokesperson for Apple, which rarely invests in venture funds, told The Wall Street Journal that the company believes the fund will invest in technologies that are “strategically important” to the iPhone maker.
The fund dwarfs those from other venture capital companies that usually make early-stage investments. A venture capital fund of $800 million would be considered significant. One of $1.2-$1.5 billion dollars would be considered large.
A person with direct knowledge of the investment philosophy of a venture capital fund that operates in India said that the Softbank Vision Fund could actually provide an opportunity for venture capital firms to exit their India investments. It would also help Indian start-ups that have scaled up and need more funds, say, a few hundred million dollars, raise money, this person added on condition of anonymity.
SoftBank Vision Fund, which will have offices in Tokyo, San Francisco, London, and New Delhi will look at some investments in India, the first person cited above said. He said the fund’s investment philosophy would be what SoftBank’s has always been – taking significant stakes, sometimes majority ones, in few companies and being actively involved in these.
In a December interview, SoftBank Group chairman Masayoshi Son said the company would invest more than the $10 billion it committed to invest in India over a decade. That commitment was made in 2014. SoftBank has since invested around $2 billion in India.
“I only bet big,” Son said in the course of that interview.
Speaking at the Hindustan Times Leadership Summit in December, Son said he would like to “be remembered as the crazy guy who bet on the future.”
The imminent successful close of the fund proves that there are enough companies and investors that are, in turn, betting on his ability to do so successfully.
This story was first published on Livemint