Softbank: The Queen In The Global VC Chessboard!

Siddhartha Dasgupta

September 10, 2020

Picture this, we are in the midst of a pandemic, corporate bottom lines have dipped, GDP growth rates are contracting heavily and some countries are amid a recession, yet there’s one organization whose numbers are up despite the realities of a VUCA (Volatile Uncertain Complex Ambiguous) World.

The company is none other than Softbank. In recent times, they have been the poster boys of VC investing across the world. Recently they reported a $12 billion quarterly profit after registering a $13 billion loss in the last fiscal year.

They have introduced their 2nd vision fund with a projected capital of $108 Billion with potential contributions from Apple, Qualcomm, and the Sovereign Wealth Fund of Saudi Arabia. Currently, their 2nd vision fund has a total capital of $38 billion.

It just goes to show that the Pandemic hasn’t had much of an impact on Softbank. They are continuing to invest in promising startups globally.   In the last 3 months alone, they have invested considerably in startups in India and US, to $200 million into US based Biofourmis, an exciting Digital Therapeutics & AI firm and $150 million into Unacademy, a promising Indian EdTech startup.

Interestingly, Softbank has been focusing fair bit on new age healthcare startups in these Pandemic times. Apart from Biofourmis, it poured in $250 million into Alto, a Silicon Valley based pharmacy startup, early on in Jan 2020.

Softbank are on a roll, its not just tech startups, the company has invested a $3.9 billion into blue chip US tech stocks, ranging from the likes of Amazon & Alphabet to Microsoft & Tesla.

They have managed to sell assets and buyback shares to reduce debt, apart from some of its existing investments bearing good returns. The smart financial moves coupled with swift actions has meant that Softbank is flushed with capital.

The success of their established startups such as Grab has also held them in good standing in the market. Earlier this year Grab raised $850 million from other investors to foray into financial services in a big way.

Opportunities for New Age Tech: AI, Blockchain & 5G

While its a known fact that Softbank has committed significant investments in IoT, AI & 5G, couple of years ago. They have recently ramped up their activities in Japan with regards to their involvement in building the 5G infrastructure in Japan. They are focusing on leading the next wave of digital transformation of Japan by betting big on the interoperability of 5G, AI & IoT.

In the space of Blockchain, Softbank has led by funding TBCAsoft in 2016. TBCAsoft along with Sprint and Taiwan’s FarEasTone has formed the Carrier Blockchain Study Group (CBSG), a consortium with an objective of developing blockchain solutions for Telcos.

In October last year, they teamed up with IBM to accelerate the vision of CBSG in developing solutions for smartphone users, such as the ability to make local payments via one’s smartphone while traveling overseas.

IBM will be providing the platform, IBM’s Hyperledger powered Blockchain solutions and Big Blue categorically mentioned that they would be partnering with Softbank on the technology front and not joining the consortium.

During the month of December last year, Softbank made an interesting play, they introduced a debit card with a built-in crypto wallet. It’s an integrated Blockchain wallet with digital currency storage and balance monitoring in real time.

Now, the card is only available in Japan, but they plan to launch the card in Southeast Asia, South Korea, US & Dubai. In recent times, Softbank has show interests in Blockchain projects.

A testimony of that interest was gauged when they were part of a group of investors who backed the Nigerian fintech company, Opay for $120 million. Nigeria is an interesting bet as the government is proactive in progressing towards a legal framework for crypto & blockchain regulation.

Conclusion

While Softbank has been picking up stakes in a large number of promising startups in every nook and corner of the world, it is still not heavily invested in AI & Blockchain technologies, something we expect they would change once they have more capital from their large partners who have pledged to contribute to the $ 108 billion vision fund 2.

Moreover, as these technologies become more mainstream, it will naturally attract more commitment from big players such as Softbank.

Source: Coindesk, Reuters, Cointelegraph, CNBC, Bloomberg 

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About the author
Siddhartha Dasgupta

Contributing Author

Sid has been a content solutions evangelist and a digital marketer for 10+ years. Having written for brands such as IBM, Infosys and other technology corporations and startups, he is always at the cutting edge of researching & writing about emerging technologies.

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