SoftBank To Downshift Vision Fund Strategy Post-Uber, WeWork IPO Flops

SoftBank CEO Masayoshi Son is reportedly reconfiguring his strategy for investing with his latest Vision Fund due to the struggles of companies like Uber and WeWork.

CNBC is reporting that Son wants to invest in companies that have a clear path to profitability and going public. He wants to slow down the speed of investing for his Vision Fund 2 as well.

The first Vision Fund has invested about $80 billion in under three years. In the future, Son will try to invest in companies that will see profitability in a shorter time frame. 

The fall of WeWork, and the slow burn of companies like Uber and Slack, have affected the way that Son plans to invest in the future. Those companies have put the Vision Fund under scrutiny and potentially harmed fundraising for the newest fund.

Son will pay more attention to future investments as well. Vision Fund 1 has spent more than 80 percent of its $100 billion, and the fund is going to hold onto 15 percent of its own capital for follow-up investments on companies that are already in its portfolio.

However, the focus for the new fund is unchanged from the first, which is to “facilitate the continued acceleration of the artificial intelligence revolution through investment in market-leading, tech-enabled growth companies.”

Finding companies with clear futures of profitability is going to be the biggest challenge for the new fund. Many companies that have taken money from SoftBank have done so because they are struggling financially and really need the money.Those types of companies are not profitable and won’t be for a long time.

The new vision fund is also going to give Son more options in terms of monetizing investments. Vision Fund 2 will try to invest all of its capital in the next four to five years, according to Vision Fund CFO Navneet Govil.