When SoftBank Founder and CEO Masayoshi Son announced his intentions in October 2016 of setting up a historical $100 billion Vision Fund to enable long-term, large-scale investments and growth in the global technology sector, nobody had ever attempted to set up an investment vehicle of this scale before, and there were doubts about the fund’s viability. However, barely a year-and-half later, not only has the Vision Fund met its fundraising target, it has even managed to invest nearly $40 billion already. The Vision Fund is changing the way VCs and investments work in tech, and the doubters are beginning to wonder if they have made a serious mistake underestimating Masayoshi drive and vision.
On Tuesday, SoftBank revealed that it had already invested 40 percent of its cash reserves in various deals through the Vision Fund and its partner investment vehicle, the $6 billion Delta Fund. According to its new quarterly report, the two Funds collectively invested over $27 billion by the end of 2017 in various projects – such as the $2.5 billion investment into Flipkart in August. Since the start of 2018, the Vision Fund has invested an additional $7.7 billion in Uber and $4.6 billion in Didi Chuxing, bringing the value of investments up to the $40 billion market.
Since the Vision Fund’s creation, critics have said that it is impossible to invest as much money as fast as is needed to meet Masayoshi target of investing the entire $106 billion in five years. However, the figures from this report should silence even the most hardcore doubters. The Uber investment as an example of how the Vision Fund is changing perceptions and expectations in VC investment in Silicon Valley and across the world. Masayoshi said, “8 billion for one investee — which is probably impossible for a traditional venture capital [firm] to make...We invest in unicorn companies that [are] the leader of a certain segment.”
Some of the investments so far are also “legacy” ones that are now being added to the Vision Fund’s portfolio by SoftBank, such as a 25 percent stake in British chip manufacturer Arm Holdings – an $8 billion deal. All included, this brings the number of companies in the Vision Fund’s portfolio to 26, says Masayoshi.
No one believed that the Vision Fund would raise its mammoth monetary target, let alone be able to meet its investment targets. 1.5 years later, Masayoshi looks set to prove all the doubters wrong. The Vision Fund is shaking things up big-time, and when the dust settles, it’s anybody’s guess what the state of the investment industry will be like.