Brief: SoftBank raising another gigantic fund, even before closing the $100b one

Illustration by Tech in Asia, from photo by Softbank.

The news (extracted from Recode):

• SoftBank is in talks to raise another massive fund, probably bigger than its US$100 billion Vision Fund, Recode reports, quoting anonymous sources.
• The sovereign wealth funds of Saudi Arabia and the United Arab Emirates – investors in SoftBank’s current fund – are likely to pitch in again.
• SoftBank invested US$6.2 billion last quarter in Grab, WeWork, Flipkart, and Roivant. SoftBank’s Vision Fund is the largest technology investment fund ever. It hasn’t yet announced the close of the final US$7 billion of the fund.

Why it matters:

• SoftBank’s outsized funds allow it to outbid other investors. Its mega deals can transform the equations between competitors in a market – such as between Flipkart and Amazon in India. It can also make moonshot bets others can’t.
• The speed with which it can place huge bets also changes the usual due diligence process in VC funding. There are concerns about how this impacts building sustainable business models.
• The financial muscle allows SoftBank to rewrite the rules. The Uber board, for example, changed its governance structure to clear the way for a mega investment by SoftBank.