SoftBank considers launching third Vision Fund

The world’s largest conglomerate is considering a new fund for tech start-ups to make up for poor performance and record losses

The world’s most prolific technology investor, SoftBank, is considering launching its third Vision Fund for tech start-ups.

According to the Wall Street Journal, the size of the new fund has not yet been determined but it is expected the Tokyo-based firm will use its own capital.

If the plan goes ahead, it is expected to launch early next year.

SoftBank recorded a record quarterly loss of $23bn (£20bn) in August this year but has had a $33.6bn capital injection after selling shares in Chinese e-commerce group Alibaba – the holding which made its name – and sees a new fund as a possible funnel for that cash to flow into.

The first $100bn Vision Fund was launched in 2017 with backers including Saudi Arabia’s sovereign wealth fund and Apple, pumping high levels of funding into start-ups including WeWork.

That was followed by Vision Fund 2 in 2019, a fund now worth 19 per cent less than the investment that went into it after being hit hard by the fall in technology stocks, including Swedish-based buy-now-pay-later unicorn Klarna.

See also: Worst over for high-growth tech start-ups, says Chrysalis

It has been rumoured the conglomerate could choose instead to re-invest in that fund rather than launch a new one.

SoftBank’s CEO Masayoshi Son, known for “blitzscaling” companies – handing them two or three times more capital they ask for in order to disrupt and dominate a market and eventually become profitable – told investors that he was “quite embarrassed and remorseful” following the performance of the previous funds, although he remains committed to the tech start-up sector.

It has also recently been reported the Japanese giant is looking to reduce its Vision Fund staff numbers by 20 per cent.

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Dom Walbanke

Dom Walbanke

Dom is a feature writer for Growth Business and Small Business, focused on matters concerning start-ups and scale-ups. He has also been published in the Independent, FourFourTwo magazine and various lifestyle...