Softbank has announced it is creating a new global tech investment fund, seeded with $25 billion of its own money. The fund, which will be London, UK based withaworking title of the Softbank Vision Fund is also set to be bolstered with up to $45BN from the public investment fund of SaudiArabia.
The Saudi PIF recently ploughed $3.5BN into Uber, of course, as part of an economic strategy to reduce its reliance on oil over the next 15 years (although, in the near term at least, Ubers ride-hailing platformdoesnt look likethe most obvious vehicle for that).Getting involved with a general global tech fund would spread the kingdoms bets further.
Softbank says it has a non-binding memorandum of understanding with the Saudi PIF at this point, under which the latterwill consider investing and becoming the lead investment partner.
It adds that a few large global investors are also in active dialogue to alsoparticipate in thefund, although its still capping the overall potential size of the fund atup to $100BN.
The investment periodfor the fund is pegged at five years, meaning it will potentially be investing $20BN into tech startups globally each year. A figure that would makeGreylocks newlyclosed $1BN fund seem modest.
Given the size and global scope of the fund, Softbank is jockeyingto become a substantial force in tech investment in the nearterm.Indeed, CEO Masayoshi Son said its aimisto becomethe biggest investor in the technology sector over the next decade. (And given hes been known to talk in terms of 300-year business plans, a decade really is quick thinkingfor Son.)
The Japanese telecoms gianthas been diversifyingits own investments in recent times, completing a 24BN acquisition of UK semiconductor firm ARM Holdings last monthto bet bigon growth in the Internet of Things.
Early Softbank investments includeweb services, such as ecommerce giant Alibaba andYahoo Japan, and more recentlyU.S. telco Sprint.
Morerecently still itinvestedin mobile gaming, although it has been rumored to be rethinking its activities therewith reports suggesting it is looking to offload its stake inSupercellto Chinese tech giant Tencent.This summer Softbankalso sold almost all its shares in games firm GungHo for $685M.
Softbank says itsobjective with the new techfundis to accelerate itsglobal growth strategy.
The Fund will make investments drawing upon [Softbank Group]s investment proficiency, operational expertise and breadth of experience in the technology sector, it notes.
According to the FT, the fund will be led byRajeev Misra, SoftBanks head of strategic finance.
