Masayoshi Son will not have many more momentous days than he did on July 26th
, the founder of SoftBank, a Japanese telecoms firm turned tech investor, will not have had many more momentous days than July 26th. First came the announcement of plans for a second Vision Fund, whose expected capital contributions of $108bn will make it the largest private technology fund ever, surpassing even the almost $100bn ploughed into its predecessor.
Start with news of the second fund. The first one has already upended the assumptions of early-stage investing. Its scale is unprecedented: the next-largest venture-capital vehicles marshal pots in the mere single-digit billions. Its speed has been striking; the Vision Fund has splurged $70bn in under three years on stakes in Uber, WeWork, Arm and others. Investors have done well enough thus far: Mr Son claimed returns of 29% as of March 2019.
SoftBank itself will be the biggest contributor: it promises to put in $38bn. That is where the Sprint deal comes in. The merger is unwelcome news for American consumers, notwithstanding requirements for the two firms to divest assets and share spectrum with Dish, a satellite-provider. It still faces antitrust challenges from state attorneys-general.
Sceptics of the megafund model still have plenty of arguments. It is too early to judge the success of the first fund, which runs until 2029. Those who think that SoftBank has been inflating tech valuations will be closely watching WeWork, which many see as a property company masquerading as a tech firm. Its initial public offering is expected in September. The governance worries that surround the first fund are unlikely to be quelled by SoftBank’s still-larger stake in the second.
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