SoftBank Group Corp. is aiming to close the first round of investment in its planned $100 billion technology fund by the end of this month, giving Chief Executive Officer Masayoshi Son an enormous war chest to go on the hunt for deals, according to people familiar with the matter. The initial investments will likely include $45 billion from Saudi Arabia and $25 billion from SoftBank, as well as $1 billion each from Apple Inc., Qualcomm Inc. and Oracle Corp. Chairman Larry Ellison, the people said, asking not to be identified because the matter is private. Abu Dhabi investor Mubadala Development Co. may join the first round, though it could also wait until a later time, they said. The initial round is likely to exceed $80 billion and the timing of the closing may still change, said one of the people. It's not yet clear when the remainder of the planned financing would be raised.
In early 2018, the founders of Chinese artificial intelligence startup SenseTime Group Ltd. flew to Tokyo to see billionaire investor Masayoshi Son. As they entered the offices, Chief Executive Officer Xu Li was hoping to persuade the head of SoftBank Group Corp. to invest $200 million in his three-year-old startup. A third of the way into the presentation, Son interrupted to say he wanted to put in $1 billion. A few minutes later, Son suggested $2 billion. Turning to the roomful of SoftBank managers, Son said this was the kind of AI company he'd been looking for. "Why are you only telling me about them now?" he asked, according to one person in the room.
A few prominent voices in Silicon Valley are calling for the tech world to exercise greater caution in vetting its investors as disquiet builds about one of the industry's biggest backers -- Saudi Arabia -- and its role in the killing of journalist Jamal Khashoggi. The calls, while still isolated, are challenging the hush-hush world of money-raising in the startup industry, where venture-capital firms and privately owned startups disclose little about their funding and operations. "It is time for all of us in the startup and VC sector to do a deep dive on our investor base," Fred Wilson, the influential founder of Union Square Ventures, a New York City-based venture capital firm with strong ties to the Valley, argued in a blog post Sunday. "Who are our investors and can we be proud of them?" "It will be a real moral challenge for anyone to accept money moving forward from Saudi Arabia," said Venky Ganesan, a partner at technology investor Menlo Ventures, which invested in Uber and Warby Parker, and former chairman of the National Venture Capital Association. So far in public, the tech community is largely staying quiet -- reflecting the difficulty of undoing some investments and the traditionally discrete nature of the Valley's many non-public companies and funds, industry experts say.
SoftBank Group Corp. has secured the first capital commitment to a $100 billion fund organized with Saudi Arabia and Abu Dhabi that would eventually put its founder Masayoshi Son in charge of one of technology's biggest investment vehicles. The telecom conglomerate is investing $28 billion and has agreements with Saudi Arabia's Public Investment Fund, Abu Dhabi's Mubadala Investment Co. and Apple Inc. With more than $93 billion committed, the fund -- which includes Qualcomm Inc., Foxconn Technology Group and Sharp Corp. -- aims to reach $100 billion within six months, SoftBank said in a statement Saturday. Mubadala committed $15 billion, according to a separate statement. The Vision Fund will seek long-term investments in businesses aimed at innovation.
As of the end of March, the Vision Fund and a smaller affiliate run by Japan's SoftBank Group Corp. 9984 -2.42% had invested around $30 billion of their nearly $100 billion in committed capital, according to SoftBank data released Wednesday, defying widespread skepticism that any single investor could spend so much so quickly on startups. While some investors have questioned SoftBank's vetting, Chief Executive Masayoshi Son, whose example has spurred other venture capitalists to start bigger funds, said the fund's performance so far is "almost too good." He pointed to a quick profit of about $1.5 billion from an Indian e-commerce company being acquired by Walmart Inc. SoftBank, which owns Sprint Corp. in the U.S. and stakes in young technology companies such as ride-hailing leader Uber Technologies Inc., started the Vision Fund a year ago. It wields a pool of money almost equal to what the entire venture-capital industry deployed globally in 2016. SoftBank filings describe the Vision Fund's investment period as the five years following the final fund close.