SoftBank's Vision Fund Nears Its Goal

Technology Development Set to Receive a Shot in the Arm


This week's announcement by SoftBank that it has raised $93 billion of its planned $100 billion Vision Fund is breathtaking, but also unsurprising.

When SoftBank announced in October 2016 that it was to raise an investment fund equivalent to the size of the GDP of Ecuador, eyebrows were raised throughout the financial and technology worlds. However, the company has a track record of pulling off highly ambitious deals. The acquisitions of Vodafone Japan and Sprint Cellular were, at the time, verging on audacious.

Unsurprisingly, when the Vision Fund hits its target of $100 billion of capital commitments, it will be easily the world's largest venture capital fund. Its scope is a dealmaker's dream. Its areas of focus will take in the Internet of things, communications infrastructure and networks, cloud technology, mobile applications, broadband businesses, financial technology and robotics.

The Vision Fund has been described by its sponsor as "patient capital". This should be interpreted as investing over the medium to long term — eight years and longer — for investment returns to be realised. Deploying a fund this size will take several years, so annual returns in excess of $15 billion will clearly take some time to deliver.

Investors in the Vision Fund are the bluest of blue chip. Anchor investors are the sovereign wealth funds of the United Arab Emirates and Saudi Arabia, as well as technology giants Apple and Foxconn. Very deep pockets are needed to participate.

Intriguingly, as part of its investment in the Vision Fund, SoftBank has committed a 25 percent equity stake in ARM Holdings, the UK-headquartered chip designer that it acquired in 2016. ARM's technology is in so many connected devices that this is a sensible move. Stakes in SoftBank's other telecom and technology assets, such as Sprint and Yahoo Japan, logically may follow.

Carrying out the strategy of the Vision Fund will be the tricky part. There will be a considerable queue of companies offering investment opportunities from all over the globe, and prioritising investments will be critical. Unusually for a venture capital fund, many investments are likely to be be undertaken in partnership with governments and supranational organisations. Bureaucracy may slow down some of these investments.

The scale of the Vision Fund is unprecedented. If it pulls off its strategy, SoftBank will contribute to a greatly accelerated pace of technology evolution. But, to get there, stable global macroeconomic and technology investment environments will be needed. A dot-com crash at some point over the next few years could see the Vision Fund disappoint. Let's hope it succeeds.

This entry was posted on May 24th, 2017 and is filed under Services. You can follow any responses to this entry through the RSS 2.0 feed or you can leave a response.

Posted By Tony Worthington On May 24th, 2017


Comments
(There are no comments yet)
Leave a Comment

Hot News

Team Tweets

CCS Insight
Recent study sparks fresh concerns about excessive phone use, as blue light from screens may be much more harmful t… https://t.co/WE3wD6iLcZ
Follow CCS Insight
Shaun Collins
Congratulations Conor and Harvey. Brilliant effort from the lads, 49 mins and all in an really worthwhile cause.… https://t.co/brFfN33FjV
Follow Shaun
Ben Wood
RT @nickmcquire: As we predicted last year & will show at #ccspredicts in a few weeks, it has turned up a notch again in 2018 with implicat…
Follow Ben
Martin Garner
Great briefing yesterday from @qualcomm's @wellingmax on the need for energy-efficient AI with edge computing. The… https://t.co/yDAQihdrQ6
Follow Martin
Geoff Blaber
Crypto mining has been a consistent thorn in Nvidia's side. When demand was up it upset core customers. Now it's do… https://t.co/OiBh3hdHbf
Follow Geoff
Marina Koytcheva
@caro_milanesi Ah yes :) My mum grows zucchini and stuffs flowers with rice- delicious!! Do you grow your own zucch… https://t.co/RT0Y4ki5GK
Follow Marina
Nicholas McQuire
As we predicted last year & will show at #ccspredicts in a few weeks, it has turned up a notch again in 2018 with i… https://t.co/tMkOFK10Gw
Follow Nicholas
Angela Ashenden
Chuckling watching Five Star’s System Addict on old #TOTP2.. in some ways it’s quite prophetic, if you can get past… https://t.co/TlPHjx9eSx
Follow Angela
Kester Mann
DT in an apparent swipe at United Internet, which is considering bidding in the upcoming German 5G auction and then… https://t.co/ZYDCoyXWaW
Follow Kester
George Jijiashvili
For the Galaxy Note 9, Samsung is offering £300 trade in discount in addition to 0% finance to the owners of Note 8… https://t.co/Cbi631p6lT
Follow George
Laura Simeonova
RT @benwood: P20 devices testament to Huawei's ambition in smartphone market. Consistently improving design, capabilities and appeal of its…
Follow Laura
Katie Taylor
Opt-out donation plan 'will not increase donors' - why you should let your family know your wishes https://t.co/H9ef8R41Cs
Follow Katie

Recent Blog Posts

Blog Post
Serious Concerns about Blue Light from Screens Researchers Say Extended Exposure Could Accelerate Blindness... Read more
Blog Post
Starry Internet, the Sequel Start-Up Launches Its Wireless Internet Service across the U... Read more
Blog Post
India's Ola Announces UK Push Ride-Hailing Company Looks for a Gateway to Europe Last wee... Read more
More blog

Latest Company News

Blog Post
Angela Ashenden Joins CCS Insight to Lead Business Collaboration Research Enterprise Research Coverage Continues to Expand ... Read more
More news