Nov 5, 2019

As SoftBank readies its earnings, all eyes are on Vision Fund 2

SoftBank Group Chairman and CEO Masayoshi Son. Photo: Tomohiro Ohsumi/Getty Images

SoftBank Group reports its earnings Wednesday, which is a bit like hosting a dinner party when your kids have the flu and your kitchen is being remodeled.

Between the lines: Pay most attention to fundraising progress, or lack thereof, for SoftBank's next Vision Fund. Pay less attention to portfolio markups/markdowns, outside of how it may affect potential LP sentiment.

The backdrop: SoftBank announced in July that it had $108 billion in commitments for Vision Fund 2 but, as we reported at the time, those weren't really commitments. They were non-binding memorandums of understanding.

There's an FT report that SoftBank will insist on stronger governance controls at portfolio companies, although that feels like a pretty empty threat.

  • Would SoftBank really deny follow-on funds to an existing investment in need, thus threatening existing value?
  • And given its demonstrated willingness to turn on a founding CEO, how would it sell this to prospective investees?
  • Maybe it's just a Saudi sales pitch.

The bottom line: Vision Fund is larger than all Silicon Valley venture capital funds put together, so the existence/disappearance of Vision Fund 2 will have an earthquake-like impact on the future funding environment.

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SoftBank chairman Masa Son admits poor judgment over WeWork

Photo Illustration: Eniola Odetunde. Photo via Yoshikazu Tsuno/Getty Images

SoftBank’s second Vision Fund “is going to be launched as scheduled” and be roughly the same size as the first, chairman Masayoshi Son said on Wednesday during the Japanese conglomerate’s quarterly earnings, although he declined to share more details.

Why it matters: That’s in spite of the storm of challenges it’s currently weathering, including rumored fundraising woes and its biggest problem child, WeWork.

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T-Mobile's CEO could take over WeWork

John Legere, T-Mobile CEO. Photo: Alex Wong/Getty Images

T-Mobile CEO John Legere is in talks to take over the top job at WeWork after the departure of co-founder Adam Neumann, the Wall Street Journal reported.

But, but, but: CNBC later reported that "a source close to SoftBank confirmed Legere is one of many candidates being considered for the role, but he’s not the leading candidate."

Go deeperArrowNov 12, 2019

SoftBank-controlled Yahoo Japan agrees to merge with Line Corp.

Yahoo Japan and Line Corp. representatives hold a joint press conference, Nov. 18. Photo: Tomohiro Ohsumi/Getty Images

Yahoo Japan, which is controlled by SoftBank, agreed to merge with Japanese messaging app operator Line Corp., which is controlled by Naver Corp. The combined company would be worth around $30 billion.

Why it matters: This will create Japan's largest internet services company by revenue and gives it scale to better compete against Chinese rivals in Southeast Asia.

Go deeperArrowNov 18, 2019