SoftBank To Lend Employees $20B To Invest in Second Vision Fund

Japanese investment firm SoftBank Group Corporation announced, this week, a plan to lend upwards of $20 billion to its employees so they can buy stakes in its second venture capital fund. This comes, of course, on the heels of widely celebrated success of the firm’s $100 billion investment in new tech startups.  

Essentially what amounts to the second Vision Fund, the goal is to raise $108 billion through this strategy.  But SoftBank is not looking solely in-house to raise this money.  In addition to employees, the bank expects to collect investments from Apple Inc, Microsoft Corporation, and the Foxconn Technology Group, as well as the sovereign wealth fund of Kazakhstan. Goldman Sachs and Britain’s Standard Chartered PLChave also been named.  Other Japanese financial institutions—so far seven have been identified, including Mitsubishi UFJ Financial Group Inc—have signed memorandums of understanding in participation. According to reports, each of these companies are willing to invest at least several hundred million dollars apiece. 

It has also been reported that SoftBank founder and chief executive officer Masayoshi Son could account for half of this new employment investment pool.  Son currently has a net worth of $16.9 billion, which makes him the second-richest person in Japan.  At the same time, SoftBank had also said, at one point, it would commit at least $38 billion in capital to this fund.  

A few weeks ago, SoftBank had reported first-quarter profits beat every analyst estimate, largely on major valuation gains from hit ventures like Slack Technologies Inc, who went public in June.  Of course, notable growth from hotel chain OYO Rooms and the food-delivery app DoorDash Inc were a big help as well.  However, these gains were offset by fair holdings value decline of more than 195 billion yen this year, including losses from holdings in Uber Technologies, Inc. 

In all, SoftBank says the Vision Fund currently holds investments in 81 projects, with a total value of $66.3 billion.  Then, in June, SoftBank revealed its first Vision Fund had already earned 62 percent returns, so far.  When the next half-dozen or so companies list publicly by early next year, these numbers are likely change quickly and favorably.