Back in May of this year, Masayoshi Son boasted of backing 60 companies in three months while also giving out an average of US$210 million a week between January and March.
Who is Softbank?
- Softbank Group Corp. is one of the largest investment firms in the world founded 39 years ago by then 24-year old Masayoshi Son.
- The company was originally established as a software distributor, but they eventually went into publishing, later becoming Japan’s largest publisher for computer and technology magazines.
- By 1999, Softbank was no longer producing its own goods and services, and eventually became a holding company.
- What that essentially means is this: Company A (in this case Softbank) purchases the majority of the shares of Company B. Since Company A now holds 80% of Company B’s shares, they are now considered the parent company of Company B.
- After only one year of being a holding company, Softbank made a US$20 million investment in a small startup company based out of China, Alibaba Group Holding Ltd.
What happened to Softbank in the past?
- Alibaba is most definitely one of, if not the greatest investment Softbank has made so far. After that US$20 million, Softbank ended up making US$60 billion just from that initial investment while holding a 24.9% stake in Alibaba.
- Alibaba’s Jack Ma and Softbank’s Son have maintained a friendship throughout the decades, and they have even served on each other’s respective boards.
- Softbank continued to make huge investments throughout the 2000s, but the company wasn’t finding another Alibaba. On top of that, the company suffered a very public downfall in a major investment into coworking space company, WeWork.
- By 2020 throughout the pandemic, Softbank experienced unprecedented losses in the form of US$19.6 billion along with Jack Ma stepping down from Softbank’s board.
- Many saw this as the end for the once-great investment company, but 2021 has proved to be a comeback for Softbank.
How much has Softbank invested in 2021?
- In the past four years, SoftBank has poured US$84 billion or so into startups through its venture capital fund, Softbank Vision Fund, and it has continued to invest back into the fund.
- With over US$100 billion backing the venture capital fund, Softbank Vision Fund has backed 224 tech firms in the past four years that range from early-stage startups to established companies like Bytedance Ltd., who owns TikTok.
- But 2021 has been different in the sense that Softbank has continued to invest heavily in companies every single week in of this year.
- Back in May, the leader of the company boasted of backing 60 companies in three months while also giving out an average of US$210 million a week between January and March.
- And so with that, Son has continued to silence his critics for the company’s losses in 2020 by investing in successful businesses such as DoorDash Inc. and Bytedance.
What comes next for Softbank?
- Of course, not every moment has been a proven success for the company since it reported losses in 2020.
- The Information reported that Softbank invested heavily (about US$12 billion) in Didi Global Inc., which is currently struggling to find its footing after going public because of regulatory pressures in China and the tech war between China and the United States.
- Regardless, Son maintains his vision for Softbank as the leader of the information revolution.
- “In the industrial revolution, one of the main players was Rothschild,” he said during one of his company meetings. “We would like to be the capital provider for the information revolution. That is our new definition or new positioning I would say to describe SoftBank Group.”
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