SoftBank unveils new $108 bn Vision Fund with Apple, Microsoft as LPs
Photo Credit: Reuters

SoftBank Group Corp said on Friday it has secured commitments to raise $108 billion from a wide range of investors including Apple Inc, Microsoft Corp and Japanese banks for its second Vision Fund to invest in technology companies worldwide.

The Japanese telecom and Internet conglomerate itself will invest $38 billion in the fund that will focus on technology companies working on artificial intelligence, it said in a statement. 

Other investors in the fund include Japanese financial services companies including Mizuho Bank, Sumitomo Mitsui Banking Corporation, MUFG Bank, Dai-ichi Life Insurance Company, Sumitomo Mitsui Trust Bank, SMBC Nikko Securities Inc. and Daiwa Securities Group Inc.

Taiwan's Foxconn Technology Group, Standard Chartered Bank and National Investment Corporation of National Bank of Kazakhstan are among the major participants.

The list of limited partners (LPs) in the new fund indicates SoftBank has diversified the  investor base from the first $100 billion Vision Fund, which relied heavily on contribution from the sovereign wealth funds of Saudi Arabia and Abu Dhabi.

However, SoftBank did say that discussions were ongoing with additional participants. "The total anticipated capital contribution to the Fund is expected to increase," it said.

The new fund's focus on AI is in line with SoftBank founder and chairman Masayoshi Son's recent comments on the new technology. Earlier this month, Son said Japan was lagging in the race to develop AI. In fact, even the first Vision Fund has largely ignored Japan in favour of countries such as India, China and the US.

SoftBank had launched its first Vision Fund two years ago and is said to have already invested nearly $80 billion in about 80 technology companies such as Uber Technologies Inc.

India has been a big beneficiary of the first fund, with companies such as Ola, Oyo, Paytm, Delhivery, Grofers and Policybazaar getting large cheques. The fund had also invested $2.4 billion in Flipkart in 2017 but cashed out last year at a profit by selling its stake to Walmart Inc.

In May, SoftBank said gains at companies like Uber and Oyo had pushed up the value of the first fund's investments in 69 companies to $72.3 billion from the acquisition cost of $60.1 billion.

The new fund will allow SoftBank to continue writing large cheques to technology startups in India and other countries, outpacing smaller venture capital and private equity funds.

Reuters cited Sanford C. Bernstein analyst Chris Lane as saying that the second fund has been "substantially de-risked" given the first fund's track record over the last two years.

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