Softbank's plans for second mega-fund hit by WeWork debacle | The Business Standard
Skip to main content
  • Latest
  • Economy
    • Banking
    • Stocks
    • Industry
    • Analysis
    • Bazaar
    • RMG
    • Corporates
    • Aviation
  • Videos
    • TBS Today
    • TBS Stories
    • TBS World
    • News of the day
    • TBS Programs
    • Podcast
    • Editor's Pick
  • World+Biz
  • Features
    • Panorama
    • The Big Picture
    • Pursuit
    • Habitat
    • Thoughts
    • Splash
    • Mode
    • Tech
    • Explorer
    • Brands
    • In Focus
    • Book Review
    • Earth
    • Food
    • Luxury
    • Wheels
  • Subscribe
    • Get the Paper
    • Epaper
    • GOVT. Ad
  • More
    • Sports
    • TBS Graduates
    • Bangladesh
    • Supplement
    • Infograph
    • Archive
    • Gallery
    • Long Read
    • Interviews
    • Offbeat
    • Magazine
    • Climate Change
    • Health
    • Cartoons
  • বাংলা
The Business Standard

Wednesday
July 23, 2025

Sign In
Subscribe
  • Latest
  • Economy
    • Banking
    • Stocks
    • Industry
    • Analysis
    • Bazaar
    • RMG
    • Corporates
    • Aviation
  • Videos
    • TBS Today
    • TBS Stories
    • TBS World
    • News of the day
    • TBS Programs
    • Podcast
    • Editor's Pick
  • World+Biz
  • Features
    • Panorama
    • The Big Picture
    • Pursuit
    • Habitat
    • Thoughts
    • Splash
    • Mode
    • Tech
    • Explorer
    • Brands
    • In Focus
    • Book Review
    • Earth
    • Food
    • Luxury
    • Wheels
  • Subscribe
    • Get the Paper
    • Epaper
    • GOVT. Ad
  • More
    • Sports
    • TBS Graduates
    • Bangladesh
    • Supplement
    • Infograph
    • Archive
    • Gallery
    • Long Read
    • Interviews
    • Offbeat
    • Magazine
    • Climate Change
    • Health
    • Cartoons
  • বাংলা
WEDNESDAY, JULY 23, 2025
Softbank's plans for second mega-fund hit by WeWork debacle

Global Economy

Reuters
04 October, 2019, 09:45 am
Last modified: 04 October, 2019, 09:55 am

Related News

  • SoftBank's internet business to invest $4.7 billion in tech over five years
  • SoftBank Group reports record losses as Ma quits board
  • Alibaba's Jack Ma resigns from SoftBank board
  • SoftBank to sell up to $41 bn in assets to buy shares, reduce debt
  • SoftBank clinches WeWork takeover deal, bailing out co-founder

Softbank's plans for second mega-fund hit by WeWork debacle

Major investors have yet to sign on, leaving a $38 billion pledge from publicly traded Softbank Group itself as the only large commitment

Reuters
04 October, 2019, 09:45 am
Last modified: 04 October, 2019, 09:55 am
PHOTO: Japan's SoftBank Group Corp Chief Executive Masayoshi Son attends a news conference in Tokyo, Japan, November 5, 2018. REUTERS/Kim Kyung-Hoon
PHOTO: Japan's SoftBank Group Corp Chief Executive Masayoshi Son attends a news conference in Tokyo, Japan, November 5, 2018. REUTERS/Kim Kyung-Hoon

Softbank Group founder and CEO Masayoshi Son is struggling to raise money for a second massive technology investment fund in the wake of the failed public offering of office-rental company WeWork and sliding valuations of other major investments, according to two people familiar with the situation.

Son is still determined to go ahead with Vision Fund 2 even though some lieutenants have urged a delay, the two people with knowledge of Softbank's internal discussions told Reuters. But it is likely to be far smaller, at least at the outset, than the $108 billion that Softbank said it had lined up when it announced the fund in July, these people said.

Major investors have yet to sign on, leaving a $38 billion pledge from publicly traded Softbank Group itself as the only large commitment, according to the sources. And the size of that pledge may itself be in doubt given some of the recent investment setbacks it has suffered and the lack of available cash on its balance sheet, according to a Reuters analysis.

The Business Standard Google News Keep updated, follow The Business Standard's Google news channel

Vision Fund and Softbank Group declined to comment on the progress of Vision Fund 2.

The implosion in the valuation of WeWork and questions about its business model have dented Son's reputation as a savvy investor and point to a big writedown by the first Vision Fund. Softbank and the Vision Fund together poured more than $10 billion into the company, investing some of that at a valuation of $47 billion in January. But WeWork recently abandoned plans for an initial public offering that would have pegged the company's worth at just $10-12 billion.

If the second fund comes in well short of Son's goal or gets scrapped it will have broad implications for Silicon Valley venture capitalists, entrepreneurs and Wall Street financiers.  

The first Vision Fund, which raised $97 billion, upended the tech investing world with massive bets on fast-growing but unproven companies. It was bigger than the aggregate amount raised by the entire US venture capital industry in 2018, giving Son a massive influence over the start-up market.

Skeptics say the troubles at WeWork and the poor public market performance of money-losing companies such as Uber Technologies Inc and Slack Technologies Inc will trigger a big decline in the value of numerous so-called "unicorn" startups worth more than a billion dollars.

"The radiation is spreading everywhere," said Scott Galloway, an author and one-time entrepreneur who teaches at New York University and who has been closely following the WeWork turmoil.

To be sure, there are investments in the 80-plus companies Vision Fund has financed that appear to be paying off quickly. Delivery company DoorDash, for one, has rocketed in value, at least on paper, from $1.4 billion last March to $12.6 billion in May.

Softbank, which owns about a third of the Vision Fund, in July reported a 62% return on its investment, including management and performance fees.

Son also has a track record of big scores: the $20 million he put into China's Alibaba Group Holdings in 2000 is now worth more than $100 billion, for example. Most analysts rate Softbank Group a buy and say it still has borrowing capacity, and its majority-owned telecom and internet media unit throws off healthy profits.

DEBT PILES UP

Back in July, Softbank said a group of companies, including technology behemoths Apple Inc and Microsoft Corp, as well as a slew of Japanese banks, and Britain's Standard Chartered Plc would contribute to Vision Fund 2. But it is unclear how firm those commitments are, and none of the corporate investors have a track record of making multi-billion-dollar commitments to an outside venture fund.

Microsoft, Apple and Standard Chartered declined to comment.

The Japanese institutions are mostly contributing only small amounts, sources familiar with the matter said. At least one financial investor is planning to make loans to the fund rather than contribute cash.

Japanese investment bank Nomura Holdings Inc, which was lead underwriter for the IPO of SoftBank's telecom unit, has decided not to put money into the new fund, according to a source familiar with its plans. Nomura declined to comment.  

Saudi Arabia's Public Investment Fund (PIF), which contributed $45 billion to the first Vision Fund, does not have large amounts of fresh cash to invest until it receives payment from a pending asset sale or proceeds from the planned public offering of the oil firm Aramco, according to people familiar with its finances. The Aramco offering is long delayed and there is no guarantee it will go ahead even next year.

The United Arab Emirates' Mubadala fund still intends to invest in Vision Fund 2 but is seeking more say in the investments, a source familiar with the discussions said.

PIF and Mubadala declined to comment.

STRAINS ON SOFTBANK

The worsening turmoil at WeWork will continue to be a strain on Softbank and the first fund. The price of WeWork bonds has sunk, its credit ratings have been slashed and big cutbacks are expected at the company, including the possibility of thousands of layoffs. Some real estate investors and analysts say that without further investment from Son or his entities, it will be difficult to stabilize given the size of its future financial commitments.

That is just one of the calls on Softbank's money. Some of the investors in the first Vision Fund receive interest payments of 7% annually on their stakes, an unusual structure that creates an ongoing need for cash. Some of that has come from sale of stakes in Indian e-commerce firm Flipkart and publicly traded chipmaker Nvidia Corp, but Softbank has also borrowed money to fund payouts to investors.

Softbank also faces the risk that a deal to merge its money-losing US telecom carrier Sprint Corp with T-Mobile US Inc could be blocked by an antitrust lawsuit from US states. If that happens, it will leave Softbank with an expensive liability, analysts say.

Softbank's stock has fallen 13% over the past month and is now trading at its lowest level since January. Softbank's operating cash flow also turned negative last quarter and it could struggle to raise tens of billions of dollars in cash, a Reuters analysis of its balance sheet shows.

Softbank does not have significant cash on hand to finance the new fund. As of June 30, it had $27.41 billion of cash and cash equivalents on its balance sheet. However, this and other current assets was more than matched by near-term liabilities.

The public offerings in recent months have been a big sore. Since they listed, shares in ride-hailing group Uber are down 34 percent and software company Slack's stock has lost 4 percent, though it is down 41 percent from its high in June. The value of other ride-sharing and self-driving technology companies could also be in question as sentiment in that sector cools.

Together with the decline in the value of WeWork, those results are expected to drag down the Vision Fund's returns, though it is difficult to get a grip on precise numbers. Softbank Group reports overall Vision Fund performance based on a variety of internal valuation metrics, but it does not publicly disclose the numbers on individual companies.

Son's financing plans for the second Vision Fund are based on a steady stream of IPOs of existing Vision Fund companies. But with the appetite for IPOs of unprofitable companies waning and concerns about a possible global recession building, the timing isn't the best.

"I think that it's incredibly likely that they'll postpone their plans for … fundraising efforts around Vision Fund 2," said Andrea Lamari Walne, a Silicon Valley-based partner at Manhattan Venture Partners, which facilitates secondary transactions.

 

World+Biz

soft bank / CEO Masayoshi Son / WeWork debacle

Comments

While most comments will be posted if they are on-topic and not abusive, moderation decisions are subjective. Published comments are readers’ own views and The Business Standard does not endorse any of the readers’ comments.

Top Stories

  • Chief Adviser Muhammad Yunus held a meeting with leaders of 13 political parties at the state guest house Jamuna today (23 July). Photo: Focus Bangla
    13 political parties urge CA to announce specific election date
  • The meeting is being held at the chief adviser’s official residence Jamuna. Photo: CA Press Wing
    Signs of conspiracies by defeated forces becoming visible: CA Yunus
  • Economist Dr Debapriya Bhattacharya. File photo: UNB
    Another govt exists within the interim administration: Debapriya

MOST VIEWED

  • Screengrab/Video collected from Facebook
    CCTV footage shows how Air Force jet nosedived after technical malfunction
  • Photo: Collected
    Bangladeshi man jailed for life in UK for murdering wife in front of their baby
  • Why Bangladesh's capital market is poised for a bull run
    Why Bangladesh's capital market is poised for a bull run
  • ISPR clarifies crashed plane was battle aircraft, not training jet
    ISPR clarifies crashed plane was battle aircraft, not training jet
  • Photo: Syed Zakir Hossain/TBS
    Secretariat protest: 75 injured in police-protester clash over edu adviser's resignation for delaying HSC rescheduling
  • Exim Bank's former chairman Nazrul Islam Majumder being taken to court on 22 July 2025. Photo: Collected
    Will repay all money if granted bail, won’t run away, ex-Exim Bank chair Nazrul tells court

Related News

  • SoftBank's internet business to invest $4.7 billion in tech over five years
  • SoftBank Group reports record losses as Ma quits board
  • Alibaba's Jack Ma resigns from SoftBank board
  • SoftBank to sell up to $41 bn in assets to buy shares, reduce debt
  • SoftBank clinches WeWork takeover deal, bailing out co-founder

Features

Photo: Mehedi Hasan/TBS

Aggrieved nation left with questions as citizens rally to help at burn institute

1d | Panorama
Photo: TBS

Mourning turns into outrage as Milestone students seek truth and justice

23h | Panorama
Illustration: TBS

Uttara, Jatrabari, Savar and more: The killing fields that ran red with July martyrs’ blood

1d | Panorama
Despite all the adversities, girls from the hill districts are consistently pushing the boundaries to earn repute and make the nation proud. Photos: TBS

Ghagra: Where dreams rise from dust for Bangladesh women's football

3d | Panorama

More Videos from TBS

Case Study of Milestone Tragedy

Case Study of Milestone Tragedy

25m | TBS Today
Milestone students demand accurate information about the deceased to be released

Milestone students demand accurate information about the deceased to be released

1h | TBS Today
News of The Day, 23 JULY 2025

News of The Day, 23 JULY 2025

1h | TBS News of the day
What Are the Parties Saying About the Appointment of Other Constitutional Bodies?

What Are the Parties Saying About the Appointment of Other Constitutional Bodies?

1h | TBS Today
EMAIL US
contact@tbsnews.net
FOLLOW US
WHATSAPP
+880 1847416158
The Business Standard
  • About Us
  • Contact us
  • Sitemap
  • Advertisement
  • Privacy Policy
  • Comment Policy
Copyright © 2025
The Business Standard All rights reserved
Technical Partner: RSI Lab

Contact Us

The Business Standard

Main Office -4/A, Eskaton Garden, Dhaka- 1000

Phone: +8801847 416158 - 59

Send Opinion articles to - oped.tbs@gmail.com

For advertisement- sales@tbsnews.net