SoftBank bags just $2b in first close of Vision Fund 2, sources say

SoftBank has completed an initial raise for a fraction of the US$108 billion it’s targeting for its second mega fund. The Japanese conglomerate has bagged just US$2 billion for Vision Fund 2 in its first close, Bloomberg reported, citing two people familiar with the matter.

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SoftBank in July announced plans to launch a new fund, with an aim to spur the growth of AI. It said that the total expected capital for Vision Fund 2 has reached about US$108 billion after landing potential investors such as Apple, Foxconn, and the National Investment Corporation of the National Bank of Kazakhstan. SoftBank itself plans to pour US$38 billion in the fund.

With WeWork’s unsuccessful initial public offering attempt and the falling valuations of its other major investments, however, SoftBank was reportedly struggling to raise money for the fund.

Sources said that SoftBank founder and CEO Masayoshi Son received suggestions to delay the launch of the fund and that its starting size could be far smaller than the US$108 billion target.

According to an earlier Bloomberg report, Saudi Arabia’s Public Investment Fund and Abu Dhabi’s Mubadala Investment Co., which contributed US$45 billion and US$15 billion to the first Vision Fund, respectively, are reconsidering the amount of their investment in the new fund.

SoftBank posted an operating loss of about US$6.5 billion in the quarter that ended September 2019, which came primarily from its Vision Fund and Delta Fund segment that reported an operating loss of US$8.9 billion for the quarter.