SoftBank and Saudi Arabia’s sovereign wealth fund are getting ready to launch a brand new tech fund that may handle as a lot as $100bn, in a transfer that may create one of many largest tech funding funds on the earth.
The brand new fund, dubbed the SoftBank Imaginative and prescient Fund, shall be based mostly in London and seeded with $25bn from SoftBank and as much as $45bn from Saudi Arabia’s sovereign wealth fund over the subsequent 5 years, in accordance with a press release from Masayoshi Son’s Japanese telecoms group.
The unusually giant fund underscores buyers’ enduring urge for food for tech sector investments, even amid considerations in Silicon Valley about inflated valuations for late-stage begin-ups similar to Uber and Airbnb.
At $100bn, the brand new fund can be the identical measurement as all funds raised by US enterprise capital companies during the last two and a half years, in response to knowledge from the Nationwide Enterprise Capital Affiliation.
SoftBank stated the fund can be investing over a 5-yr time horizon, which, at $20bn a yr, would characterize roughly 1 / 4 of complete annual investments in US-based mostly enterprise-backed begin-ups. It didn’t say whether or not it might give attention to begin-ups or later-stage tech corporations.
Each SoftBank and Saudi Arabia’s sovereign wealth fund have been stepping up their investments within the tech sector. Earlier this yr SoftBank bought UK chip designer Arm Holdings, in a £24bn deal that marked the most important acquisition of a European tech firm.
Saudi Arabia’s sovereign wealth fund, generally known as the Public Funding Fund, has additionally been working to diversify its holdings with extra tech investments that included a $three.5bn injection into Uber, the transportation firm, earlier this yr.
The PIF is on a mission to help Saudi Arabia’s new 2030 financial plan, which incorporates decreasing reliance on fossil fuels and bolstering the personal sector.
Mr Son, SoftBank’s founder and chairman, stated that the SoftBank Imaginative and prescient Fund can be “the most important investor within the know-how sector” over the subsequent decade.
The fund might be led by Rajeev Misra, SoftBank’s head of strategic finance.
Earlier, SoftBank tech investments had been largely steered by Nikesh Arora, who was handpicked to succeed Mr Son on the helm of SoftBank however as an alternative left the corporate earlier this yr. SoftBank Capital has invested in a variety of tech teams — Seize, the transportation community, in addition to gaming firm Zynga and information website BuzzFeed.