SoftBank announces new $108-billion Vision Fund with Apple, Microsoft

SoftBank Group’s founder Masayoshi Son launched a second Vision Fund, seeking to extend his reign as the world’s most influential technology investor.

The Japanese conglomerate will commit $38 billion to Vision Fund 2 with the goal of raising a total of $108 billion, SoftBank said Friday. Apple Inc, Microsoft Corp, sovereign wealth fund of Kazakhstan and a number of Japanese finance companies are also expected to contribute capital, SoftBank said. If the fundraising meets that goal, it would be even larger than the first $100 billion effort.

Son wants to raise a new massive fund every two or three years to take advantage of opportunities he sees in cutting-edge technologies such as artificial intelligence and autonomous driving. SoftBank in June disclosed that the initial Vision Fund has earned 62 per cent returns so far after making 71 investments for a total of $64.2 billion.

And while several of its portfolio companies -- Uber Technologies Inc. and Slack Technologies Inc. -- have gone public, profitable exits might still be years away.

Saudi Arabia’s Public Investment Fund and Mubadala Investment Co., key partners in the first vehicle, were not listed among the investors in the second fund, but they are still in talks about possible investments, said Daisuke Sawatake, a SoftBank spokesman. Among the investors in the original Vision Fund, only Apple and Foxconn Technology Group have plans to contribute to the successor so far.

SoftBank has also received a memorandum of understanding from Japanese financial firms Mizuho Financial Group Inc., Sumitomo Mitsui Financial Group Inc., Mitsubishi UFJ Financial Group Inc., Dai-ichi Life Holdings Inc., Sumitomo Mitsui Trust Holdings Inc., Daiwa Securities Group Inc., and SMBC Nikko Securities Inc. Other contributors will include Standard Chartered Plc, an unnamed Taiwanese investor and the fund’s management, according to the release.

The original Vision Fund was announced in October 2016, but it took another seven months for its first major closing. Saudi Arabia was a key investor with a $45 billion contribution, followed by SoftBank’s $28 billion, and $15 billion from Mubadala. Investors also included Qualcomm Inc. and Sharp Corp. While the Saudis acted as a constraint on Son’s power at the original fund, the Japanese billionaire seems set to take a more leading role in its successor.

After decades of building his telecom empire, the 61-year-old may finally have more time to focusing on investing. He has handed over the day-to-day management of SoftBank’s domestic telecom operations, a cash-cow division that went public in December, to his long-term lieutenant Ken Miyauchi. Now the company’s Sprint Corp. unit and T-Mobile US Inc. are seeking to merge in the US.

Another question is whether SoftBank will keep up the pace and scale of investments. The first fund targeted stakes of over $100 million, in just two years amassing a portfolio of 82 world’s leading technology companies, including Uber and WeWork Cos. Ride-hailing is the single biggest segment, including stakes in China’s Didi Chuxing, India’s Ola and Singapore’s Grab. According to data from market researcher CB Insights, SoftBank Group was an investor in 24 of 377 global unicorns, startups valued over $1 billion.