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SoftBank’s Vision Fund or How to Lose 5 Billion Dollars in a Car’s Seat

In: OVERCOMING CRISIS Case Studies of Asian Multinational Corporations

Author

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  • Jakub Majko

Abstract

The idea of robotics and artificial intelligence (AI) overpowering human intelligence was an inspiration for many sci-fi novelists, cinematographers, and investors. Singularity, when the human brain won’t be able to keep up with a technological development, offered inspiration for the investment strategy of the scale never heard of. Masayoshi Son, the CEO and founder of SoftBank Group, established in May 2017 the largest technology-based investment fund with a total capital of $100 billion: the Vision Fund. The venture capital fund aims to invest in startups and companies primarily in technological industries but also includes the financial and transportation sectors. Four years after the fund’s establishment, SoftBank reported over $36 billion Vision Fund unit profit which counted as the largest annual profit recorded by any Japanese company to date (CNBC, 2021). Nonetheless, the fund’s journey has been rather challenging. The company prematurely picked its investments and overfunded startups under the Vision Fund’s portfolio. One such case was a commercial real estate company, WeWork. The investment that was reportedly agreed on in a shared taxi ride ended up being a major lesson for Masayoshi Son, costing the company nearly $5 billion.

Suggested Citation

  • Jakub Majko, 2023. "SoftBank’s Vision Fund or How to Lose 5 Billion Dollars in a Car’s Seat," World Scientific Book Chapters, in: Parissa Haghirian (ed.), OVERCOMING CRISIS Case Studies of Asian Multinational Corporations, chapter 7, pages 95-109, World Scientific Publishing Co. Pte. Ltd..
    • Handle: RePEc:wsi:wschap:9789811259340_0007
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    Keywords

    Globalization; Asian Business/Management; Entrepreneurship; Strategy; Crisis; Marketing; Decision Sciences; Gaming; Automotive; K-Pop; Aviation Industry; Restaurant and Hospitality Management; Keiretsu; Chinese Management; Korean Management; General Business; Management; International Trade;
    All these keywords.

    JEL classification:

    • M1 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration
    • M16 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - International Business Administration
    • L26 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Entrepreneurship
    • D23 - Microeconomics - - Production and Organizations - - - Organizational Behavior; Transaction Costs; Property Rights

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