SoftBank achieves $93b first close on global tech fund

Much of the capital in the SoftBank Vision Fund comes from SoftBank itself and Saudi Arabia’s Public Investment Fund. The two groups launched the vehicle last October, pledging to commit at least $25 billion and up to $45 billion, respectively. Other first close investors include Abu Dhabi’s Mubadala Investment, Apple, Foxconn Technology Group, Qualcomm and Sharp Corporation.

Sharp – which was acquired by Foxconn last year – confirmed last week that it would put in $1 billion, reasoning that the fund would give it an edge in key strategic areas such as the internet of things (IoT). The size of the other investments has not been disclosed, although Mubadala indicated it would commit up to $15 billion.

SoftBank’s contribution has been pegged at $28 billion and it will be partially satisfied through the transfer of a 24.99% stake in microprocessor designer ARM Holdings to the fund. The Japanese conglomerate bought ARM last year for $32 billion. Positions in other SoftBank portfolio companies such as Guardant Health, Intelsat, Nvidia, OneWeb and SoFi could also be folded into the fund.

The fund will target minority and majority positions in private and public companies, ranging from start-ups to established businesses. Areas of interest include IoT, artificial intelligence, robotics, mobile applications and computing, telecom and communications infrastructure, computational biology, cloud technologies and software, consumer internet, and financial technology.

Rajeev Misra will lead the team tasked with investing the fund, supported by professionals based in London, San Carlos and Tokyo. He joined SoftBank two years ago from Fortress Investment Group. Earlier this year, SoftBank agreed to buy Fortress for $3.3 billion. Masayoshi Son, the tech giant’s chairman and CEO, said at the time that Fortress and the Vision Fund platform were part of SoftBank 2.0 transformation strategy. This theme was reiterated in the statement announcing the first close.

Son noted that patient capital from strategic partners is required if companies are going to realize the potential of technology in addressing global challenges. “SoftBank has long made bold investments in transformative technologies and supported disruptive engineers,” he said. “The SoftBank Vision Fund is consistent with this strategy and will help build and grow businesses creating the foundational platforms of the next stage of the information revolution.”

SoftBank has interests covering a wide range of IT-related products and services, ranging from US mobile operator Sprint to ARM to Yahoo Japan. With the acquisition of Fortress, which has $70.1 billion in assets under management, and the Vision Fund, the company is expected to become one of the world’s largest asset managers.

SoftBank has also backed various tech start-ups with a view to staying at the forefront of innovation and the Vision Fund allows other investors to participate alongside it. Recent deals include a reported $1.4 billion commitment to One97 Communications, the parent of Indian online payments and e-commerce platform Paytm, and a $5 billion contribution to a $5.5 billion round raised by Chinese ride-hailing app operator Didi Chuxing.

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