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Home / Business / SoftBank launches second tech megafund, with Apple among the top investors

SoftBank launches second tech megafund, with Apple among the top investors



TOKYO – Japan

Softbank Group
Corp.


9984 1.09%

unveiled a second technology megafund that was even larger than its nearly $ 100 billion vision fund, and answered skeptics who asked if anyone in such a short Time to raise so much money. [19659004] Vision Fund 2, as the company calls it, promises $ 108 billion in capital from more than a dozen investors

Apple
Inc.


AAPL -0.79%

and Microsoft Corp. to Kazakhstan's sovereign wealth fund, the SoftBank announced on Friday. Approximately $ 38 billion of this capital will be raised by SoftBank itself and funded through proceeds from the first Vision Fund.

Other investors, including

Goldman Sachs Group
Inc.

are in active talks to invest, the persons familiar with the matter said on Thursday, and the size of the fund is likely to grow. The Wall Street Journal reported Wednesday that Wall Street Bank, along with Apple, was one of the investors seeking to support the fund.

Standard Chartered


STAN 0.61%

PLC and Microsoft participate in an investment of approximately $ 40 billion from SoftBank itself.

The opening of the second fund is a victory for Masayoshi Son, Chief Executive of SoftBank, the Launched the first Vision Fund with just two funds Years ago, amid widespread doubts about its profitability.

At $ 98.6 billion, the first Vision Fund was already much larger than any other single mutual fund. In the technology world – the target for both vision funds – the funds tended to be orders of magnitude smaller and investments of $ 100 million were considered high.

The Vision Fund has rewritten the rules on venture capital and technology investment by putting $ 100 million in the minimum amount and spending billions in startups like hailstones

About Technologies
Inc.

and Didi Chuxing Technology Co. Other investors, such as Sequoia Capital, have been forced to raise billions of dollars of mutual funds to invest in valuable start-ups, raise valuations, and enable newer companies to stay private.

The result of the first vision The operations of the Fund are uncertain. Uber is quoted below the price at which it went public in May. The Vision Fund bought its stake at an even cheaper price and retained its stake.

Initial Performance Fund Initial Performance Indicators – SoftBank reports a return of 29%, mainly due to valuation gains on its holdings. has won a larger and more diversified group of potential investors for Vision Fund 2.

While the first fund was largely backed by sovereign wealth funds from Saudi Arabia and the United Arab Emirates, as well as SoftBank itself, the group of companies pledging funds for the Vision Fund 2 includes several Japanese and Taiwanese banks, insurers and pension companies – a more conservative and risk-averse investor type.

At least two investors from the first Vision Fund – Apple and Taiwanese electronics giant Foxconn Technology Group – are pledging money for the second fund, SoftBank said. Although Saudi Arabia and Abu Dhabi have not yet registered, they said they are likely to reinvest, the Wall Street Journal reported earlier.

The money arrives just in time for the rapidly issued Mr. Son. [19659009] At the end of March, SoftBank announced that the Vision Fund had invested $ 64 billion in 71 companies, including two that it had divested. Since then, it has participated in deals worth at least $ 5 billion, or nearly $ 70 billion, according to Dealogic.

Since the Vision Fund also has to pay money to pay out an annual return of 7% to some investors, SoftBank has already spent most of its cash in the first fund.

The second Vision Fund plans to invest In terms of artificial intelligence, Mr. Son will benefit from the increasing amount of real data collected by sensors, cameras and other machines. These data would allow companies to predict what people will do, he said.

"The power to predict the future is imminent," Son said last week at a conference in Tokyo held by SoftBank for their corporate customers. "The amount of data will increase millions of times in the next 30 years." SoftBank's ability to secure funding for the second Vision Fund is likely to be driven by the planned merger of SoftBank-controlled Sprint Corp.

T-Mobile US
Inc.

The two US mobile operators are currently working to reach an agreement with the Department of Justice to address federal opposition to their merger, although some states are also trying to block it. If the merger occurred, SoftBank would have a minority stake in the merged entity, and Sprint's debt would no longer be included in SoftBank's books, which would allow the Japanese company to take more risks.

Write to Mayumi Negishi at [email protected] and Phred Dvorak at [email protected]

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