SoftBank has considered possibly creating a Vision Fund 3 after using its current capital. The Vision Fund has enabled SoftBank to invest in various technological companies and emerging markets, helping to shape the future of the global economy.
In this article, we’ll look at some potential uses for a Vision Fund 3, including how SoftBank may consider investing in different sectors and how it could strengthen its market position.
SoftBank May Consider Vision Fund 3 After Existing Capital Used
SoftBank’s Vision Fund has rapidly become one of the world’s leading technology investment organisations. With more than $38 billion deployed in startup and growth companies over the past few years, SoftBank’s Vision Fund has significantly impacted the world of tech and venture investing.
Headed by SoftBank CEO Masayoshi Son, Softbank’s Vision Fund invests in tech Unicorns, large private and publicly-traded companies, and startups. Most investments have been in Asia, India and China, followed by North America. In contrast to traditional venture capital investing, which seeks high-yield viable investments with a timeline of approximately five to seven years, the Vision Fund operates with a much longer return period of up to 10 years as it looks for extremely high returns from “transformative” sectors like artificial intelligence (AI), robotics, autonomous vehicles or cloud computing.
The Vision Fund has created opportunities for hundreds of technology innovations by providing financial resources for visionary ideas that otherwise may have remained dormant within corporation or agency research labs or a garage. In addition, to maximise return on investment from transformational ideas that new technologies could conceivably disrupt, SoftBank’s vision fund provides counsel and assistance through their network of experienced Principals who offer guidance on areas such as strategy formation and operations planning using its extensive media presence to create public awareness.
More recently SoftBank has announced plans to consider Vision Fund 3 after existing capital is used up given its success in transformative investments with high returns. They reported outstanding results with an IRR (Internal Rate of Return) at 72% for their first two funds since March 2020 (Fund 1 & 2) — just two years after launch — doubling initial expectations from 35%. This tremendous success is due to uncorrelated success stories such as ARM Key Holdings, doordash or Wagwalking as well as late stage equity investments such as Uber Technologies Incorporated; WeWork; Improbable Worlds Ltd; Slack Technologies Inc.; Oyo Rooms; ESR Cayman Ltd., Nvidia Corporation and many others adding important milestones in both venture capital history effectiveness but also corporate development performance through cutting edge technologies that have forever changed certain industries like taxi services or hospitality among many others helping cement global brands we are all familiar with today.
SoftBank’s Vision Fund 3
After using its existing capital, SoftBank might be considering the launch of an additional Vision Fund 3 to take advantage of newly-emerging business trends. This new fund could be employed to invest in various industries such as artificial intelligence, robotics, and transportation. Technology companies worldwide will likely keep their eye on this new venture, wondering what opportunities it could offer them.
In this article, we’ll discuss the potential benefits that SoftBank’s Vision Fund 3 could bring.
What SoftBank May Consider for Vision Fund 3
SoftBankʼs Vision Fund 3 could be used for a variety of investments. This includes new investments in companies helping to accelerate technological advancements, funding for existing portfolio companies (including those from Vision Funds 1 and 2), and capital used toward buybacks and dividends.
SoftBank may consider investing in startups at various stages of their development that are helping to drive technological advances, from seed-stage ventures to late-stage growth companies. SoftBank made several high-profile investments through the original Vision Fund such as Slack, Uber, and WeWork. With Vision Fund 3, SoftBank could invest in other startups developing cutting-edge technology or innovating in established industries.
SoftBank may also use part of the fund to help existing portfolio companies scale their businesses and/or access additional financing if they fail to meet their goals set by previous visions funds. Additionally, SoftBank may look at strategic opportunities to repurchase shares of existing companies who have seen their valuations significantly drop since SoftBank’s initial investments or distribute dividends if cash flows are sufficient enough to do so within its portfolio securities or subsidiaries outside its main technology business such as Softbank Robotics or Real Estate holdings.
The success of the Vision Funds depend on Softbank’s ability not only identify but select promising technology startups operating within popular sectors such as AI, finance (fintech), healthcare (healthtech), agriculture (agritech) and more with potential for high returns yet risk due diligence must be done as not all investments produce desired positive outcomes along with factoring in the competitive environment pertaining to each sector the vision fund considers investing into for greater returns versus loss prevention.
Potential Investments
SoftBank is reportedly considering launching a third Vision Fund. Although specific details about the fund’s size and availability remain largely speculative, SoftBank may use it to invest in upcoming projects and startups. Here are some potential investments that SoftBank’s Vision Fund 3 may consider:
• Automation technology: Automation technology can further the efficiency of businesses, reduce costs, and increase value. SoftBank could use Vision Fund 3 to invest in automation technologies such as robotic process automation and artificial intelligence, enabling faster data processing, more informed decisions, and a better customer experience.
• Digital healthcare: As the world becomes increasingly digitised, health services have also had to move online. Startups are revolutionising healthcare with digital solutions such as telemedicine platforms providing access to remote medical care while maintaining patient confidentiality. Investing in companies developing innovative digital healthcare solutions could be beneficial for SoftBank.
• Big Data analytics: Big Data analytics has enabled companies to develop insights from vast amounts of information quickly and effectively. Companies that create innovative ways to capture insights from huge data sets can be appealing targets for investment forSoftBank’sVisionFund3.
• Augmented Reality (AR) and Virtual Reality (VR): From immersive gaming experiences to educational applications, AR/VR technologies are becoming ever-more attractive investments due to their potential for practical applications both at enterprise and consumer levels.. Investing in startups looking into exploiting these technologies for new uses provides an opportunity for growth for SoftBank’s portfolio companies
Artificial Intelligence
SoftBank’s Vision Fund 3 could be used to pursue investments in advanced research and development (R&D) into Artificial Intelligence (AI).
AI is becoming increasingly influential in many aspects of our lives, such as self-driving cars, natural language processing, and machine learning. SoftBank believes that AI has the potential to drive transformational change across a wide range of industries. By investing in AI-related companies and projects, the fund could help some companies accelerate their development, resulting in an increasing number of well-functioning services the industry provides.
Additionally, SoftBank’s prominence as an investor in this space would attract new talent and resources to create innovative breakthroughs within the field. Such investments may also help SoftBank attain a greater market share within this sector, allowing them to stay on top of new trends while cementing their position as a leader in technology investment.
Robotics
SoftBank may consider Vision Fund 3 after existing capital is used. Robotics is likely to be a key part of any potential new fund.Vision Fund has made over $7 billion in robotics investments, including several startups and established companies such as Google-owned Boston Dynamics, a leader in advanced and dynamic humanoid robots. Softbank also owns 65% of automated trucking company Embark and about 20% of AI-driven robot firm CloudMinds.
Other robotic investments made by SoftBank include robotics manufacturing platform automation for e-commerce warehouses, autonomous industrial safety robots carried by HumanIB, an incredibly agile multi-directional humanoid robot named Hubo from Robotis Limited, an industrial arm from Tokyo-based FANUC Corp., an artificial intelligence (AI) platform for robot control from Colorado-based Covariant.ai and a Japanese robotic suit called HAL that uses AI to help physically disabled people walk again.
Internet of Things
One area where SoftBank may consider investing through Vision Fund 3 is the Internet of Things (IoT). The IoT has become increasingly important as companies seek to leverage the connectedness of devices, data and people. As a result, ioT solutions are becoming an integral part of businesses and everyday life, helping to reduce costs, add convenience and increase efficiency.
SoftBank has identified the potential of investing in IoT technology, focusing on leveraging its current investments in the space. For example, SoftBank could use Vision Fund 3 capital to invest specifically in startups related to the development and deployment of new products or solutions leveraging advanced technologies such as 5G connectivity, blockchain technology, artificial intelligence (AI), machine learning (ML), virtual reality (VR) and augmented reality (AR). This could also include investing in organisations working on enhanced digital infrastructure for IoT solutions.
Such investments could further help SoftBank’s current portfolio companies capture more market share by expanding their product offering and scale up operations quickly. SoftBank could also look at acquiring startups that have developed innovative solutions for smart homes, connected cars or automated factories. Any investments made by SoftBank through Vision Fund 3 will likely focus on leveraging existing strengths while exploring new areas where further growth is likely.
Autonomous Vehicles
The potential investment from SoftBank’s Vision Fund 3 could be used to invest in autonomous vehicle companies. A wide range of companies have already been funded and developed for the autonomous vehicle space including Tesla, Waymo and Cruise Automation. These companies are focused on developing driverless technology, sensors and hardware required, and advancing machine learning capabilities to bring autonomous vehicles to market.
SoftBank’s existing Vision Funds have already heavily invested in the autonomous vehicle space – some notable investments include $2 billion into General Motors’ Cruise division in 2018, $740 million into China-based Didi Chuxing two years ago, and $300 million invested into Nauto – a self-driving car start-up based out of Germany last year. With such large capital injections being made into the industry over the past few years it is likely Softbank could look to make further investments into this rapidly growing market should they decide to proceed with Vision Fund 3.
As autonomous vehicles progress towards becoming mainstream reality it will be interesting to see what further investments Softbank will make if Vision Fund 3 comes to fruition.