According to two people familiar with the matter, SoftBank’s second Vision Fund injected approximately US$13 billion into more than 50 companies in the second quarter, marking a sharp increase in its investment pace.
According to publicly disclosed information, the fund invested less than US$2 billion in less than two dozen companies in the first three months of this year. One of the people familiar with the matter said that many of the company’s latest investments have not yet been publicly announced.
As SoftBank increases its spending, other financially strong investors such as Tiger Global Management have invested in high valuations Startup company, Contributed to the most active private technology fund in history in the first half of the year.
The first $100 billion Vision Fund is known for holding billions of dollars in companies such as Chinese ride-hailing apps Didi Chuxing And the flexible working group WeWork, which subsidizes huge losses when competing with competitors in large markets.
Recently, its rate of return has improved after many of its invested companies went public, including South Korean e-commerce group Coupang and American food delivery company DoorDash.
Through the second Vision Fund, the Japanese group changed its approach-instead of making a more modest bet on healthcare and software businesses, instead of making billions of dollars in heavy industries such as urban transportation and construction.
A person familiar with the matter said that as part of the agreement reached with investors, the first Vision Fund needs to invest at least $100 million per transaction, which limits its ability to invest in relatively young companies.
After failing to raise funds from external supporters such as Abu Dhabi and Saudi Arabia’s government funds, SoftBank, led by CEO Sun Zhengyi, has pledged $30 billion of its own funds to the new fund.
Deep Nishar, senior managing partner of the Vision Fund in the United States, said that the second Vision Fund has begun to “cooperate in the early stages of the company’s life cycle” in an attempt to find attractive investments.
Nishar said: “In the current market environment, valuations at the early stages of the company’s life cycle are more attractive than those at very late stages.”
Video communications startup Mmhmm said on Wednesday that it has raised $100 million in a so-called Series B financing led by the second Vision Fund. The fund also led a US$140 million second round of financing for artificial intelligence company Vianai Systems in June.
In other start-ups, such as the celebrity video messaging app Cameo, the second vision fund is in a secondary position in the competition of venture capitalists, investing tens of millions of dollars at a time instead of hundreds of millions of dollars.
A person familiar with the matter said that SoftBank does not expect to raise any funds for the second Vision Fund from outside investors, but it may invest more of its own funds. The company initially stated that it would raise up to US$108 billion for the fund.
Vision Fund executives try to downplay We work And other notable setbacks from the first fund, touting a renewed focus on start-ups using artificial intelligence.
Two people familiar with the matter said that the new fund has invested approximately US$20 billion in more than 90 start-ups and plans to invest in at least 30 more companies. In contrast, the first Vision Fund has invested USD 85.7 billion in less than 100 companies.
Nishar said: “The number of companies being established that require a lot of capital to succeed has decreased.”
SoftBank is not always successful when it invests in small companies. Consumer goods startup Brandless and dog walking app Wag both ran into trouble after receiving large investments from the first Vision Fund.
The second Vision Fund did not completely avoid big bets. In May of this year, the fund led a $775 million round of investment in Perch, one of several well-funded groups that aims to integrate independent Amazon merchants.
Several partners and other senior executives have recently withdrawn from the team that manages the Vision Fund, including Ervin Tu, a partner who oversees ByteDance and Uber’s investment in the ride-hailing company. Jeffrey Housenbold left the fund earlier this year, and he has made many of the fund’s largest consumer investments in the United States.
SoftBank said it has added 30 people to the investment team in the past four months. In February of this year, the fund hired Microsoft executive Nagraj Kashyap as a managing partner to lead investment in consumer companies.
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