SoftBank struggles to raise money for Vision Fund 2 amid WeWork woes, sources say

Masayoshi Son, founder and CEO of Japan’s SoftBank, is struggling to raise money for its second mega fund amid WeWork’s unsuccessful attempt at going public and the falling valuations of its other major investments, two people familiar with the matter told Reuters.

Masayoshi Son / Photo credit: SoftBank.

However, the head exec is still looking to forge on with Vision Fund 2 even though he has received suggestions to delay its launch, the sources said, adding that the fund’s starting size could be far smaller than the US$108 billion amount SoftBank had previously announced.

The sources with knowledge of SoftBank’s internal discussions also said that other major investors have yet to sign on to back the fund. The company’s US$38 billion pledge to Vision Fund 2 remains the largest commitment.

According to Reuters, the size of SoftBank’s own investment in the fund may also be in doubt, given some of the investment setbacks it suffered recently and the lack of available funds it has on its balance sheet.

Vision Fund and SoftBank declined to comment on the progress of Vision Fund 2, according to the report.

The Japan-based conglomerate announced its plans for Vision Fund 2 in July, with an aim to accelerate AI growth through investments in tech-enabled growth companies. It’s expecting to land potential investors such as Apple, Foxconn, Microsoft, and Standard Chartered, among others.

SoftBank and Vision Fund 1, which raised US$97 billion, together have invested more than US$10 billion in WeWork, which recently withdrew its initial public offering. In addition, it was reported that the co-working firm is looking to slash its workforce and slow down its expansion to decrease expenses.

WeWork was also reportedly in talks with investors, including SoftBank, to raise new funds.