SoftBank Group is close to tying up $100bn for a technology fund that it announced with the government of Saudi Arabia, the Japanese company’s founder and chief executive officer Masayoshi Son said.
“I am talking to a few investors and I think we are oversubscribed,” Son said at an event in New Delhi on Friday, without providing detail. He said he came to New Delhi straight from a visit to Saudi Arabia.
SoftBank and Saudi Arabia’s Public Investment Fund announced the new venture in October with the Japanese company saying it will invest $25bn, while Saudi Arabia committed $45bn. The two have been talking to other investors for the remaining $30bn.
Improving earnings at SoftBank’s US unit Sprint Corp and steady cash flows at home have freed Son to focus on his longer-term vision for a company that’s made tens of billions investing in companies such as Alibaba Group Holding and Supercell Oy. Qatar and Abu Dhabi investor Mubadala Development Co are considering investing in what is tentatively named SoftBank Vision Fund, people familiar with the matter have said.
Son said with the funding in place he will be looking for opportunities to make the investments.
The Japanese billionaire said SoftBank would surpass its commitment of investing $10bn in India in 10 years. “There is new technology and new excitement in India,” he said.
Son, 59, has been among the most bullish investors in Indian startups and SoftBank has plowed hundreds of millions of dollars into its portfolio in the country including Uber Technologies rival Ola in the ride-hailing segment and Amazon Inc rival Snapdeal.
Both these unicorns – startups valued at $1bn or more – are said to be in aggressive fund-raising mode but India’s startup environment has since become challenging and investors have pulled back. In the first three quarters of this year, startups raised $4.23bn, compared with more than double that amount in the same period of 2015, according to data from researcher Preqin.
The largest two in SoftBank’s portfolio are facing a particularly rough funding environment as they are taking on deep-pocketed global behemoths Uber and Amazon making investors wary. Ola, for instance, is said to be looking to raise money at a lowered valuation, according to a person familiar with the discussions.
Last month, SoftBank booked an investment loss of ¥58.1bn ($513mn), mainly on its investments in India, which include ANI Technologies Pvt’s Ola and Jasper Infotech Pvt’s Snapdeal. Of that, ¥29.6bn was due to a currency impairment. SoftBank spent $32bn on the purchase of UK-based chipmaker ARM Holdings. “I said to myself ‘I’m such a lucky man, I got the company so cheap’,” Son said. ARM will ship 1tn chips in 20 years, compared with 15bn chips in 2015, he said.
Son is betting on the future of connected devices with the purchase of ARM and he has said the chipmaker will be a key building block for the Internet of Things and play a role in bringing about advanced artificial intelligence.
“I dreamed of acquiring ARM for 10 years and finally I had the money,” said Son.
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