The CEO of SoftBank, Masayoshi Son, has been very provocative over the years with regards to his investment intentions. In a personal capacity he is Japan’s wealthiest man and this is not the first time he has discussed his investment plans. However, a potential $880 billion investment in technology companies over the “coming years” would be a massive shift in technology funding.
Vision Fund
The company has set up the Vision Fund which is already committed to investing $88 billion in the short to medium term. Masayoshi Son is expected to authorise Vision Fund 2, 3 and 4 with new investment vehicles set to be created every 2 to 3 years. There is no doubt that a potential $880 billion investment in technology companies is enormous but in the years ahead technology will become even more important.
Investing in 1000 companies
Apparently the SoftBank Vision Funds will invest across 1000 technology companies all of which will be in their relatively early stages. We know there are many technology companies starved of funding via the traditional routes and when you bear in mind venture capital investment worldwide last year accounted for $127 billion of funding, an $880 billion investment pool is a game changer.
Those who follow the stock market will be well aware that SoftBank has acquired a number of technology companies in recent times. Masayoshi Son is forward-looking, imaginative and not afraid to be the “first to market” which has been the downfall of many people. The only problem at this moment in time is a lack of detail about where the funds will come from but with an array of investors looking to increase their technology exposure, successful initial investments will likely give the Vision Fund a great reputation. We know that with great reputations you can attract large amounts of investment!
Technology is the future
We only need to look at the US online retail market, which is expected to top $1 trillion a year by 2027, to see how technology is impacting our everyday lives. Amazon is expected to see its market share top 50% by 2027 which is a brave forecast and would potentially leave little space for competitors. The problem for Amazon is the need to keep growing, making bigger and bigger acquisitions and investing more and more money – leading to a greater and greater risk of failure.
At some point investors will look towards more niche technology companies which may be part of the retail sector or a services/industrial operation. Only last week we saw the acquisition by Facebook of an app called “tlc” which allows people to send friendly messages and heartwarming thoughts to friends and family. The app was only launched a couple of months earlier but has already racked up 5 billion messages to show there is space in the marketplace. The acquisition price was not disclosed but we can safely say we are talking in the tens of millions of dollars.
Summary
While the investment plans of Masayoshi Son are extreme to say the least, a staggering $880 billion, we know that technology is the way forward. From artificial intelligence to friendly apps, from website plug-ins to the generation of sales leads, technology is taking over.