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21 July 2017

Editorial: Softbank and how to 'rule the entire world'

“The Vision Fund is not about taking on the world with one specific technology, business model or brand. It’s about people sharing the same vision coming together to start a revolution.”

Author: James Mawson, Editor-in-chief

"Those who rule chips will rule the entire world. Those who rule data will rule the entire world."

Masayoshi Son, chief executive of SoftBank Group, made the quote at its Softbank World conference in Tokyo, Japan*, this week as part of a near-three-hour tour de force presentation on the investment strategy of the world’s largest corporate and government-backed venture fund.

Artificial intelligence combined with data gathered by billions of sensors will bring on an "information revolution" to deliver accident-free driving and grow safer food, Son said.

These themes cropped up in the $93bn Softbank Vision Fund’s latest deals, this past week. The unit led or co-led the largest-ever agriculture technology investment, Plenty’s $200m series B round; autonomous car technology developer Nauto’s $159m B round; and autonomous robotics technology developer Brain’s $114m C round.

Those were this week’s deals. SoftBank’s internal rate of return over about 20 years of corporate venturing is 44% overall, and would still be 42% without the $100bn return on its early Alibaba investment, Son added.

Excluding reports on Softbank buying stakes in Uber, Grab and Makeblock, Softbank is an active acquirer. Last week it completed the $3.3bn takeover of asset manager Fortress Investment Group, and Softbank has also acquired or agreed to buy UK-based semiconductor company ARM, satellites group OneWeb and robotics pioneer Boston Dynamics.

The CEOs of all three of those companies spoke at Softbank World, and Son described a future where satellite networks cover every inch of the Earth and a trillion devices connected to the internet disgorge data into the cloud where it is analysed by artificial intelligence. 

“The Vision Fund is not about taking on the world with one specific technology, business model or brand,” Son said in a speech reported by newswire Bloomberg. “It’s about people sharing the same vision coming together to start a revolution.”

Jonathan Bullock, chief operating officer (COO) at the Vision Fund’s investment management operation, spoke at the Global Corporate Venturing Symposium in May about how “to compare it with a traditional VC fund is to misunderstand our strategy”.

Others are certainly trying to join this revolution. Investment bank Goldman Sachs more than tripled its net revenues from private equity investing revenues to about $2bn in the first six months of 2017 from $626m in the same period a year earlier. These revenues helped drive its profit above expectations (even if share price fell 2%). As a venture investor and an early Uber backer, it seems the bank can just smell money.

But one man wants to rule them all, it seems.

* Softbank world was held during Tim Lafferty, COO at Global Corporate Venturing's parent company, Mawsonia, visit to the country this week ahead of our first GCV Asia Congress on 21 September in Hong Kong http://www.gcvasia.com/

 

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