SoftBank commits $5b extra to ‘not that well-liked’ Imaginative and prescient Fund 2 at the same time as Rajeev Misra, three others stop board
World’s biggest startup backer Masayoshi Son has literally doubled down on its artificial intelligence focused second Vision Fund or Vision Fund II (SVF2) despite being unable to attract new and existing investors from the first Vision Fund to back it. SoftBank Group (SBG) committed $5 billion to SVF2 (launched in October 2019 targeting $108 billion size) in October this year up from $5 billion committed to the fund by the Group and its subsidiaries as of September 30, 2020. “As a result, as of November 9, 2020, the commitment of SBG to SVF2 totaled $10.0 billion,” it said on Monday in its consolidated financial report for the six-month period ending September 30, 2020. “SVF2 has yet to have an external close,” it added. Nonetheless, SBG had contributed only $2.8 billion of its committed capital to SVF2 as of the second quarter-end.
“Vision Fund II and Vision Fund III are open always to third-party investors but at the moment we are not that popular yet,” Son said through a translator during the earnings call on Monday. However, he would “keep our (company’s) doors open always,” for investors the company has been “working with for a long term.” SVF2 has posted an unrealized valuation gain of $5.1 billion during the period after the listing of the Chinese real estate platform Beike on August 13, 2020. SVF2 has made $640 million investments during the three months ending September 2020 to bring its total investment from SVF2 to $2.6 billion in 13 companies including Indian startups Unacademy and Lenskart, according to the quarterly results.
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SBG also announced, on Monday, the resignation of four of its top leaders from its board. This included Vision Fund’s CEO Rajeev Misra, COO Marcelo Claure, CSO Katsunori Sago, and Governor and Board Member of the Public Investment Fund of Saudi Arabia Yasir O. Al-Rumayyan. “The changes to our Board build upon the enhancements we made in June, including ensuring we have a greater proportion of External Board Directors, and further highlight SoftBank’s commitment to corporate governance,” said Son.
SVF1, which had raised a commitment of $98.6 billion had received a commitment worth $65.5 billion from the third party or external investors while $33.1 billion was committed by SBG and its subsidiaries. Out of the total amount, the fund, as of September 30, 2020, had invested $75 million in 83 companies (including 7 listed firms) including Indian startups such as Paytm, Delhivery, Grofers, Policy Bazaar, OYO, Ola, etc. The fund posted $7.6 billion of unrealized valuation gain, of which $4 billion was recorded on unlisted companies in its portfolio. SBG reported a $6.1 billion profit for the September quarter vis-à-vis $6.5 billion loss in the year-ago period following losses from Uber and WeWork.
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