The SoftBank Vision Fund is a venture capital fund established in 2017 and managed by SoftBank Investment Advisers, a subsidiary of the SoftBank Group. With over $100 billion in capital, it is the world's largest technology-focused investment fund. The fund was created to invest in companies developing technologies aligned with global artificial intelligence trends, spanning sectors such as finance, transportation, and beyond. In 2019, a second fund, SoftBank Vision Fund 2, was founded.
History
The SoftBank Vision Fund was created in May 2017 by the SoftBank Group and the Public Investment Fund (PIF). The initial $100 billion was raised with PIF contributing $45 billion, SoftBank contributing $28 billion, the Mubadala Investment Company contributing $15 billion, and the remainder from other investors, including Apple. Masayoshi Son, SoftBank's CEO, described his intent to invest broadly in AI-related technologies, with the project internally codenamed "Project Crystal Ball."
In early February 2019, the Vision Fund had built a 4.9% position in Nvidia stock but was forced to sell all shares when a prolonged decline in Nvidia's price threatened the fund's overall performance. The fund had used a collar strategy to protect against a severe drop that began in October 2018, which limited upside. The fund recorded a $3.3 billion return on its Nvidia investment. By June 2024, the market value of those shares had exceeded $150 billion, leading Son to remark that "the fish that got away was big."
In January 2020, several SoftBank-funded startups, including Getaround, Oyo, Rappi, Katerra, and Zume, began cutting staff. In February 2020, activist hedge fund Elliott Management bought a $2.5 billion stake in SoftBank, pushing for restructuring and transparency regarding the Vision Fund. With many portfolio companies underperforming and high-profile failures such as WeWork's failed IPO, investor confidence fell. In May 2020, SoftBank announced the Vision Fund lost $18 billion, leading to layoffs of 15% of the fund's 500 staff. Consequently, Vision Fund 2 raised less than half of its $108 billion goal, with all funding coming from SoftBank itself.
In May 2021, SoftBank announced the total fair value of both funds as of 31 March 2021 was $154 billion, with a record profit of $36.99 billion driven by its investment in Coupang. SoftBank then raised Vision Fund 2 to $30 billion, planning to continue self-funding. In 2022, the Vision Fund posted a record loss of 3.5 trillion yen ($27.4 billion) for the fiscal year ending 31 March 2022, as stock valuations plummeted. Failed investments included Katerra, Wirecard, and Zymergen, drawing criticism for insufficient due diligence.
In July 2022, CEO Rajeev Misra announced he would step back from managing Vision Fund 2, with other executives also departing. In August 2022, the fund reported a $23.1 billion loss for the April-June quarter and planned headcount cuts. Masayoshi Son said he was "embarrassed" and "ashamed." By early 2023, the fund had invested just $300 million in startups in the October-December quarter, down over 90% from the previous year. In May 2023, SoftBank disclosed a record $32 billion loss for the fiscal year ending March 2023. In November 2024, Misra formally stepped down, succeeded by Alex Clavel.
Business Overview
SoftBank Vision Fund is managed by SoftBank Investment Advisers, while Vision Fund 2 is managed by SoftBank Global Advisors, both subsidiaries of the SoftBank Group. The firm has an investment team that evaluates and selects companies for the funds. Investments are primarily venture capital or private equity, with most Silicon Valley investments exceeding $100 million. SoftBank Investment Advisers is headquartered in London, with additional offices in Silicon Valley, Tokyo, Abu Dhabi, Hong Kong, Mumbai, Riyadh, Shanghai, and Singapore.
Notable Investments
The SoftBank Vision Fund has made notable investments in companies such as Arm Holdings, OpenAI, Nvidia, Coupang, WeWork, and Uber. These investments span various sectors, including semiconductors, generative AI, e-commerce, and shared mobility, reflecting the fund's broad focus on technology-driven growth.
Impact and Criticism
The Vision Fund's aggressive investment strategy has been both praised and criticized. While it has backed transformative companies, its performance has been volatile, with significant losses in 2022 and 2023. Critics have pointed to insufficient due diligence and reliance on the greater fool theory, while supporters note its role in funding innovation. The fund's challenges have led to restructuring and leadership changes, but it remains a significant player in global technology investing.