The Largest VC In The World Is ‘Embarrassed’ Of Its Investments
Japanese Billionaire, Masayoshi Son has been known to place huge bets and invest millions in tech startups through the USD 100 Bn SoftBank Vision Fund.
SoftBank, founded by Son, invests in emerging technologies like AI companies through its Vision Fund and has even invested in a number of tech startups stemming from the Silicon Valley. It’s diversified portfolio ranges from AI, fintech, healthtech, real estate, transportation and logistics just to name a few. The group is also reaping massively from investments made in Alibaba Group Holding Ltd, where it owns 29.5% of the company.
Two prominent bets made through the fund were around USD 11 Bn in WeWork and more than USD 7 Bn in Uber. However, the performance of the two companies has been questionable lately.
Uber went public earlier this year but it has flopped since its debut on Wall Street and doubts whether it will be profitable next year are spurring. Uber has reportedly been trading more than 30% below its initial public offering prices and has even revealed a more than USD 5.2 Bn loss in the second quarter. New York-based office-sharing company WeWork, on the other hand, was slated for an IPO but filed for withdrawal of the prospectus after failing to impress investors. This came a week after former CEO Adam Neumann was ousted. Prior to this, the company’s valuation had fallen by tens of billions of dollars.
Speaking in an interview with Japan’s Nikkei Business magazine, Son revealed that he felt embarrassed about his investments following the flopping of the two tech companies.
“Looking at the growth of companies in the United States and China, there is a strong feeling that this is not enough. I once thought that the size of the market in the US and China was enviable, but there are a lot of companies that are hot and growing rapidly from countries with small markets like Southeast Asia. It is not the case that Japanese entrepreneurs, including me, are making excuses,” said Son.
He recognized that his accomplishments have fallen short of his goals, something which he was unhappy about. The fallout of the two companies has contributed to SoftBank Group’s shares falling more than 30 per cent.
“Companies like WeWork and Uber are criticized for being in the red, but in 10 years they’ll be making substantial profits,” Son said.
Despite claims that the group is struggling to raise funding for Vision Fund II following recent events, it is still forging forward with its plans. However, the amount raised might be less than the USD 108 Bn that the group had targeted.
In the interview, Son also touched on the current business practices in Japan. According to Son, the entrepreneurial spirit in Japan has considerably grown faint, with a declining presence of Japanese companies in the world.
Historically, Japan had been viewed as one of the countries that would lead in technological advancement globally. This view, Son feels has dwindled pointing out a slump in fields which Japan is leading in terms of technology. He termed this as ‘very bad’ seeing as the world is moving rapidly yet Japan has lost its competitiveness.
Speaking on SoftBank Group’s ambitions, Son said, “I am now trying to create a more strategic holding group than his business. Gather entrepreneurs who share their ambitions through the vision fund and greatly expand their power with the ‘group strategy’. We are building a group focusing on the vision of ‘AI is the source of growth’. Although it has just begun, I feel a huge potential.”
Son is the second richest person in Japan, with a real-time net worth of USD 19 Bn. Throughout his career, Son has held many leadership roles. He served as President of Yahoo and Vodafone Japan and held a chairmanship role at Sprint. He currently serves as the Chairman and President of Japanese conglomerate, SoftBank Group.
Feature photo courtesy: Economic Times
