Japan-headquartered internet and technology group SoftBank has supplied $2.5bn for investments out of its second Vision Fund since October 2019, Reuters reported today, citing people familiar with the matter.
The corporate has been raising money for a successor to its $98.6bn first vehicle but reports earlier this month stated it has yet to secure any external capital and expects to close the vehicle at about half its initial 12-figure target.
However, Vision Fund has continued to make investments, recently providing $150m for childcare e-commerce platform FirstCry earlier this month and $250m for medicine delivery service Alto Pharmacy in January.
SoftBank is considering committing an additional $2.5bn to the fund, according to one of the sources, money that would presumably go to forthcoming rounds set to be closed by the likes of Tokopedia and Rebel Foods.
The question of how much SoftBank can subsidise the fund is open to question. It recorded a $6.5bn operating loss in the financial quarter ending September 2019 due to the $8.9bn operating loss incurred by Vision Fund, largely because of the difficulties for portfolio company WeWork.
The corporate’s balance sheet does however look more promising after the legal approval granted last week to the merger of US telecoms subsidiary Sprint with peer Deutsche Telekom’s T-Mobile subsidiary. Sprint has debts running into the tens of billions of dollars.
News of SoftBank’s commitment comes after people with direct knowledge of the matter told the Financial Times on Sunday that Vision Fund is seeking billions of dollars in capital for a vehicle with a hedge fund-like structure that will invest in publicly-traded companies with an initial budget below $2bn.
The vehicle’s prospective backers include Abu Dhabi’s sovereign wealth fund, Mubadala, one of the key investors for the first Vision Fund, and Kazakhstan’s sovereign wealth fund, which are mulling a joint commitment of up to $4bn according to a person involved with discussions.
