Vision Fund: A brief overview
Vision Fund is the biggest bombshell that dropped on Silicon Valley in 2016.
Created by Masa Son’s SoftBank, the Vision Fund has become the talk of the town by massively disrupting startups in Silicon Valley and beyond. With a value of $100 billion, SoftBank’s Vision Fund can be considered to have the world’s biggest technology investor. Here is everything that you need to know about the $100 Billion venture capital.
How did this begin?
Self-made billionaire Masayoshi (Masa) Son has been considered to be a wizard in the technology industry as an investor. He has made various companies the big brands that they are today by believing to invest in them. These companies include Jerry Yang’s Yahoo and Jack Ma’s Alibaba.
Today, his company, SoftBank, which is the Japanese tech and telecom giant, has been the major force behind creating the Vision Fund. The Vision Fund is built on the motto, Shared Vision, Amplified Ambition. The Vision Fund for investments came out in 2016 and since then has been creating the most noise in venture capital in the tech industry.
Masa Son is the biggest force behind this, all since he met with every founder in person until a deal had been signed. The fund has also been known as Saudi Arabia’s project since one of the biggest investors to the same is Muhammad bin Salman, the crown prince of Saudi Arabia. The crown prince has been known to provide Mr. Son with around $45 billion in an attempt to diversify the kingdom’s economy.
The current status
Currently, there are above 80 companies that are a part of this Vision Fund portfolio. The investors have provided late-stage companies over the last three years with long-term capital for anywhere between 20% to 40% ownership return. This venture capital investment has put around $40 billion into 19 CNBC Disruptor 50 Companies, 14 out of which were on the 2019 Disruptor 50 list.
These companies include the ad tech platform from India, InMobi; San-Francisco-based food delivery company DoorDash and Opendoor; and another San-Francisco-based company that allows homeowners to sell their property easily among other start-ups.
One of the Senior Managing Partners at Vision Fund, Deep Nishar stated that this venture capital investment is based on the philosophy that sometimes $10 million or $20 million is not enough capital to make a disruptive industry transformation. These start-ups require hundreds of million dollars to achieve their goals. This is the reason why such a huge venture capital investment has been set up.
Although the Vision Fund is known to look for investment in late-stage companies, it does not mean that they invest only in global powerhouses. This can be evident from looking at the venture capital investment made in cloud computing software company Cohesity. Cohesity had been ranked 32nd on the Disruptor 50 list of 2019 by CNBC.
One of the principles that the Vision Fund prides itself on is that due to their enormous capital pool and resources, unlike other venture capital, they do not force the start-ups that they invest in to turn into a small business in order to make profits quickly.
Too good to be true?
Some start-up founders believe that the Vision Fund indeed sounds too good to be true and do not feel that it can stay true to what it stands by for very long, due to financial reasons. Opendoor founder Keith Rabois has stated that the success of companies like Opendoor, DoorDash, and many others were anyway coming out as strong market players and would have become the large companies that they are without utilizing Vision Fund’s capital investment.
Vision Fund 2
Upon the massive success of the 2016 Vision Fund’s performance, the idea of creating another $1 billion venture capital called Vision Fund 2 seemed to be feasible, at least to SoftBank.
Despite the venture capital not gaining popularity among third-party investors, Vision Fund 2 has invested $2.6 billion into 13 companies, including Indian start-up companies such as Lenskart and Unacademy, among others. The VC, despite a few hiccups, seems to be going steady in the industry.
The Vision Fund has become a unique vision for the world with an immensely valuable pool of resources for its venture capital. With the success of Vision Fund 1 and the launch of Vision Fund 2, it can be well understood that the SoftBank Group is not taming down from expanding this further.
However, it is to be noted that the Fund makes social impact investments that mostly revolve around software companies. Maybe an expansion in their investments would be seen in the future.
Frequently asked questions
1. Who owns SoftBank?
- SoftBank is owned by Masayoshi Son, who is the third richest person in Japan at a $20.6 billion personal fortune.
2. How much is the Vision Fund worth?
- The Vision Fund when it was launched in November 2018 was worth $2 billion. The current value as calculated by SoftBank is at $142.8 billion as of March 31, 2021.
3. What are some of the prominent companies funded by Vision Fund?
- Vision Fund has funded Ola, Uber, PayTM, Yahoo Japan, and many others.
4. How do I get in touch with SoftBank Vision Fund?
- They have contact addresses in London, Silicon Valley, and Tokyo. The postal address is available on their website.
5. How does SoftBank Vision Fund work?
- The Vision Fund is overseen by the SoftBank Investment Advisers. It invests in emerging technologies such as Artificial Intelligence, Robotics, real estate, retail, etc.