Mistletoe founders to acquire SoftBank Ventures Asia

Taizo Son, the younger brother of SoftBank founder Masayoshi Son, is the founder of the new entity, which is known as The Edgeof and is based in Singapore. The entity’s co-founder and chairman is Atsushi Taira, who previously spent more than a decade at SoftBank, working at group level and for subsidiaries like Yahoo Japan and MySpace Japan and India-based joint venture Bharti Softbank Holdings.

The Edgeof was formed “to build upon Mistletoe's eight-year legacy of nurturing over 170 innovative start-ups committed to social and environmental sustainability,” according to a statement. Mistletoe is described as a “collective impact community” comprising more than 400 entrepreneurs, investors, and researchers. It has invested across Japan, the US, Southeast Asia, India, and Northern Europe.

SoftBank first raised the prospect of divestments last August as valuation corrections in technology stocks globally undermined its flagship Vision Fund series, resulting in consecutive quarterly losses at group level. Son said he would explore selling Fortress Investment Group and make substantial cost reductions elsewhere. Around the same time, reports emerged that SBVA was up for sale.

Although Fortress is still to be sold, SoftBank has sold various other assets, including part of its stake in China’s Alibaba Group. The JPY 3.16trn (USD 23.7bn) loss for the three months ended June 2022 became JPY 129.1bn for the six months ended September and JPY 912.5bn for the nine months ended December. This is despite Vision Fund investment losses rising from JPY 2.9trn to JPY 5trn.

SBVA was established in 2000 as SoftBank Ventures Korea and initially focused on the Korean market. In 2011, it began investing globally. The entity was rebranded in 2019, by which point assets under management (AUM) were USD 1.1bn and it backed over 250 companies across 10 countries. There was an emphasis on artificial intelligence (AI), the internet-of-things (IoT) and robotics.

AUM is now approximately USD 2bn across 21 funds and the focus areas are largely unchanged. With teams operating out of Seoul, Beijing, Singapore, and San Francisco, SBVA claims to “plug great start-ups into the SoftBank Group ecosystem in order to facilitate side-by-side growth.” It leverages the SoftBank network for post-investment support and collaborates with entities like Vision Fund.

There are numerous examples of SBVA, which typically participates in Series A and B rounds with ticket sizes of USD 10m-USD 20m, introducing companies to Vision Fund when they are ready for growth-stage funding. These include Indonesian e-commerce marketplace Tokopedia, Singapore lending business Funding Societies, China’s Keenon Robotics, and Nigerian payments platform Opay.

Collaboration with SoftBank Group will continue under The Edgeof’s ownership, the statement added. The goal is to combine SBVA’s ability to identify and develop start-ups with The Edgeof’s networks and community-building expertise. Multiple funds will be established with remits ranging from early stage to growth stage and plentiful LP co-investment opportunities are expected.

"We are excited to commence this new journey with The Edgeof. By joining forces, SBVA will be able to leverage its expertise, insights, and network to support visionary entrepreneurs in their endeavours and enable them to make a lasting global impact that transcends Asia,” said J.P. Lee, CEO of SBVA.

The Edgeof’s stated aim is to become Asia’s leading venture capital and ecosystem builder, focused on natural resources, sustainability, AI and robotics, healthcare, and education.

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• Topics
• North Asia
• Buyouts
• GPs
• Japan
• Asia
• Softbank
• SoftBank Ventures Asia
• M&A