Will Vision Fund 2 Save SoftBank in 2020?
Entrepreneur's New Year’s Guide
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The year 2020 will see Japanese investor SoftBank getting ready for Vision Fund 2.0. According to a report by The Economic Times, the Japanese conglomerate is likely to announce the first close of the fund at around $30 billion in the first quarter of next year.
How 2019 Made SoftBank’s Future Uncertain
The year 2019 was a tough one for SoftBank. Two of its most iconic companies in whom chairman and CEO, Masayoshi Son, had great trust, failed to meet the expectations at the stock market. What happened with SoftBank and its portfolio companies changed a lot of things in the Indian start-up and business ecosystem. Companies realized profitability holds more importance over growth-only strategy that the companies have been deploying up until now. SoftBank’s first edition of the Vision Fund has investments from giants such as Apple, Qualcomm, Foxconn, Saudi Arabia Public Investment Fund (SAPIF) and Abu Dhabi’s Mubadala Investment Company. It was earlier also reported that SAPIF, after the failure of WeWork’s and Uber’s IPOs, had decided to only invest the profits from Vision Fund into Vision Fund II, Mubadala is planning to lower its stake in the second vision fund to $10 billion from the current $15 billion.
The time has arrived when SoftBank needs to revise its strategies and approach.
In an interview with ET, Rajeev Misra, CEO of SoftBank Vision Fund, said, “When you are making so many investments in such a little time, you are trusting the data as the time spent on diligence is limited. We learnt a lot. Investing is a patient, long-term process, it is not about the speed of deployment, and Masa (Masayoshi Son) is himself saying this. We are strengthening things like governance and rights in portfolio companies,”
Indian Unicorns in Line for IPO
Softbank came in the limelight for writing big cheques for start-ups and inflating their valuations. With most of the high-valued companies going for IPOs failing, becoming profitable has become the need of the hour for all these companies.
Indian unicorns including Oyo and Ola are waiting in the wings to go up for listing on the stock market. According to Misra, “Holiday (Oyo’s) home business is stable” and “India, China, Saudi Arabia, UK and the US are going to be the focus for their hotel business.”
The two companies have been told to focus on profitability single-mindedly by their investors. According to one of Ola’s investors whom Entrepreneur India talked, the cab aggregator is “almost profitable”.