SoftBank plans $100 billion fund every few years

SoftBank CEO Masayoshi Son.
Getty

• SoftBank has massively disrupted startup investment with its
  $97 billion Vision Fund.
• Its CEO Masayoshi Son says the company plans to do it again
  by raising a new $100 billion fund every few years.
• He wants to invest $50 billion a year.
• That’s an insane amount of money and will radically alter
  venture capital if it happens.

SoftBank CEO Masayoshi Son plans to throw an insane amount of
cash at startups over the next decade, saying that the firm will
raise a new $100 billion fund every few years.

Son told Bloomberg in an interview that he plans to spend
around $50 billion a year. Bloomberg cited National Venture
Capital Association figures showing that the entire US venture
capital industry invested $75.3 billion in 2016.

SoftBank is still in the process of closing its first $100
billion fund, the Vision Fund. That has raised $97 billion to
date and SoftBank has already spent several billion on
acquisitions and investments.

Son did not go into detail about where he planned to obtain the
new tranches of cash. The first Vision Fund has backing from
Apple, Qualcomm, and Saudi Arabia’s Public Investment Fund.

The Vision Fund is run by nine managing partners, and has dropped
$500 million into early-stage startup Improbable and $7.7 billion
for a stake in Uber, among other investments.

SoftBank insists it doesn’t compete with traditional venture
capital firms, and in the UK is making inroads in forging
connections with a tight-knit community of investors.

Still, peer investors in the UK are bemused by the Vision Fund’s
activities, and describe it as a “spaceship.” Others are wary of
Rajeev Misra, boss of the Vision Fund and Son’s right-hand man,
describing him as a complex deal-maker.

The arrival of yet more multi-billion dollar funds will transform
the market for startups.
According to figures from Delta Partners, startups are
finding it harder to raise seed-stage funding thanks to SoftBank
driving a trend for megadeals.

Startups lucky enough to raise money from SoftBank benefit from
being in a portfolio of top-tier companies like Uber and WeWork.
Indian budget hotel network Oyo recently closed $1 billion in new
funding, led by SoftBank.

Founder Ritesh Agarwal told Business Insider earlier this month
that “Son-san” was a visionary, who wanted to invest in startups
with long-term impact, rather than seeking short-term exits.

“It’s about working with us, and the broader family of the Vision
Fund, which has top companies in every segment worldwide, to help
us gain knowledge, and how to share our proprietary knowledge…
that’s the group you become part of,” he said.