The name Softbank has become synonymous with modern day technology companies, but who are they? Softbank was founded in 1981 by Masayoshi Son. In 2019, it sits as the 36th largest listed company in the world, larger than both Intel and Johnson & Johnson. As always, the company has somewhat humble beginnings, retailing computer parts in Japan before becoming a publisher. Eventually, the company became a dominant internet services and communications company after purchasing Vodafone Japan and Yahoo! Japan in the 2000’s.
The success of these acquisitions saw the renowned Masayoshi Son move front strength to strength and specialise in investments in high growth technology companies. Softbank was one of the earliest investors in Jack Ma’s Alibaba and retains a 29% shareholding today. They also have investments in US mobile provider, Sprint, ARM Holdings a British semi-conductor manufacturer and Chinese insurer Ping An. More recently though, Softbank has become a fund manager of sorts, raising two rounds of $100bn for their ‘Vision Fund’.
The Soft Bank Vision Fund 1 and 2, both seek to invest into venture capital investments on behalf of Softbank and external investors. One particularly dominant external investor is Saudi Arabia, as it seeks to diversify its fossil fuel reliant on economy. The fund aims to access venture capital and private equity on behalf of its diverse pool of Government and Investment Bank clients with a particular focus on artificial intelligence, robotics, data, financial technology and communications infrastructure.
Some of the most high profile investments made thus far include all three ride share services, Uber, Didi and Ola, as well as corporate technology Slack and Australian founded real estate ‘tech’ platform Compass. As we know, most of these companies are growing quickly but struggling to move towards profitability in an incredibly competitive market. Whilst the headlines are increasingly negative it is far too early to decide whether Softbank’s foray into being a VC fund manager is a success or failure at the current time.