SoftBank plans to launch a third fund which will invest in startups and is likely to be quite large in size, according to a report.
The planned new fund will be part SoftBank’s plan to turn a new leaf after a disastrous performance with the first two funds. The third fund is likely to see the infusion of its own capital, reports The Wall Street Journal.
Softbank’s first vision fund was launched in 2017 with a size of $100 billion. It introduced a second one was in 2019 which was of $40 billion. Both funds, have been below expectations. At its recently concluded quarterly results for the month of June, SoftBank posted a record $23 billion loss and this led to CEO Masayoshi Son remarking that he was quite embarrassed and remorseful about the fund’s performance.
Masayoshi Son, Founder and CEO, SoftBank
Among those pushing for a new fund are some employees of the Vision Fund, it could be seen as a way to reset their compensation which is partly based on the profits at the fund and its investments, the report says.
SoftBank is also considering putting additional money into Vision Fund 2. “We have been defensive rather than offensive…more selective,” said, Son, at a quarterly results presentation.
A number of investments of SoftBank are now publicly listed companies like Uber, DoorDash, and Alibaba, whose share prices have been under considerable pressure. Added to this, it has not been able to complete the sale of ARM, the semiconductor company under its portfolio to Nvidia due to regulatory concerns.
Son also noted that the group has to control themselves in what he termed as “heightened investment discipline”. He also hinted at cost optimisation measures at the company. Added to this, SoftBank continues to see significant management churn with some of the key lieutenants of SoftBank founder like Rajeev Misra and Munish Verma leaving the organisation.