Softbank-Saudi tech fund becomes world's biggest with $93 billion of capital

Japanese conglomerate Softbank today said that it has freezed Dollars 93 billion capital for its Softbank Vision Fund that will be invested in the technology sector and expects total commitment in it to reach USD 100 billion in six months. The Fund is targeting a total of US $100 billion of committed capital, with a final close within six months. Just past year, Uber picked up $3.5 billion from Saudi Arabia's PIF, the kingdom's main investment fund while SoftBank has backed Chinese cab hailing giant Didi Chuxing and Southeast Asia's Grab besides Ola.

Besides, it will also have the right to acquire certain investments already acquired, or agreed to be acquired, by the SoftBank Group, including 24.99 per cent of its holding in electronic chipset technology firm ARM and investments in Guardant Health, Intelsat, Nvidia, OneWeb and SoFi.

Yasir Alrumayyan, managing director of Saudi Arabia's sovereign wealth fund, said the fund will help his country's strategy of developing "a diversified, knowledge-based economy".

The new fund made its announcement during the visit of President Donald Trump to Riyadh and the signing of tens of billions of dollars worth of business deals between US and Saudi companies.

The PIF signalled an interest in the tech sector a year ago by investing US$3.5 billion in USA ride-hailing firm Uber.

In a statement, Softbank's CEO Masayoshi Son said the Vision Fund - which hopes to close a total of $100 billion in committed capital by November - "will help build and grow businesses creating the foundational platforms of the next stage of the Information Revolution".

Softbank said the Fund will be its primary vehicle to realise its SoftBank 2.0 vision, with preferred access to investments of $100 million or more that meet the Fund's investment strategy.

The Vision Fund will include investments already acquired or agreed to be acquired by SoftBank including a 24.99 per cent stake in United Kingdom chipmaker ARM, reportedly a key requirement to secure Mubadala's backing, and investments in Guardant Health, Intelsat, NVIDIA, OneWeb and SoFi. SoftBank aims to reach USD100 billion with a final close within six months.

In a prepared statement Son, said: "Technology has the potential to address the biggest challenges and risks facing humanity today".

Other sectors in which the fund may invest include mobile computing, communications infrastructure, computational biology, consumer internet businesses and financial technology.

The billions invested will be directed towards the tech industry, ranging from companies in artificial intelligence to robotics and cloud technology.

SoftBank said the fund would be run under its SB Investment Advisers unit and lead by the unit's CEO Rajeev Misa.

Nizar Al-Bassam and Dalinc Ariburnu of newly formed Centricus, who advised on structuring and fund raising efforts for the Vision Fund, will continue their roles as advisers.

  • Joanne Flowers