New investors set to join SoftBank’s $100bn Vision Fund
Daimler, Japanese banks and Larry Ellison are among latest backers of giant tech venture
Germany’s Daimler and Japan’s three largest banks are set to become investors in SoftBank’s Vision Fund as the Masayoshi Son-led company looks to complete fundraising for its $100bn technology investment fund, according to people briefed on the matter.
The Mercedes-Benz maker along with MUFG, Mizuho, and Sumitomo Mitsui Banking Corporation will be among the final investors in the fund, which is the largest ever created in private equity or venture capital, these people said.
They added that other new investors will include Larry Ellison, the billionaire US co-founder of software group Oracle who is investing personally, and the sovereign wealth fund of Bahrain.
Mr Son, founder of SoftBank and the person who has final say on the Vision Fund ’s investment decisions, is also set to make a personal investment as well as create structures that allow the company’s executives to participate in the fund.
The new investments will allow the fund to reach its goal of hitting about $100bn, set out when it was launched with the backing of the state investment funds of Saudi Arabia and Abu Dhabi just over a year ago.
SoftBank is debating internally when it should begin fundraising for its next fund, one of these people said, which is expected to be named Vision Fund II.
Daimler and the Japanese banks are set to be among the smaller ones in the fund, alongside earlier participants such as Apple, Qualcomm, Foxconn and Sharp. About $88bn of the fund comes from SoftBank, Saudi Arabia and Abu Dhabi.
Daimler has been among the most active carmakers investing in ride-hailing and car-sharing platforms in recent years.
In 2014 it acquired MyTaxi, a cab-hailing service that now has 70m passengers in Europe. Last year it acquired Chauffeur Privé in France, a rival to Uber. It also owns the car-sharing company car2go. To build up scale, Daimler and BMW announced in March that they would merge their new mobility services on everything from electric vehicle charging to ride-hailin
Individuals close to the three Japanese banks said their decision to invest had a twin motivation: the quest for returns in Japan’s ultra low-interest environment and the desire to further strengthen their relationships with what is by far Japan’s most active corporate name.
All the new investors will be participating under the terms of the fund’s unusual structure, which sees them receive 62 per cent in preferred units paying out an annual coupon of 7 per cent over the fund’s 12-year life cycle, and the rest with equity.
SoftBank itself is the only investor which has full equity exposure, giving it the most upside to the fund’s investments in addition to the management and performance fees.
SoftBank outlined on Wednesday in a presentation that it had spent $29.7bn of the Vision Fund since inception. It has placed bets on more than 30 companies including ride-hailing group Uber, shared-office provider WeWork and chipmaker Nvidia.
SoftBank, Daimler, the Japanese banks and a spokesperson for Larry Ellison declined to comment. Representatives of Bahrain’s sovereign wealth fund were not immediately available for comment.