Summary List Placement
In the late 1990s, Masayoshi Son laid out a plan for hundreds of years of growth.
Son’s investment firm, SoftBank, could become the world’s biggest investor and even “sustain sales for 300 years,” he said in a recorded video from the time, in part because SoftBank would encourage its companies to work together.
In other discussions, Son said his investments could imitate gun-senryaku, the Japanese term for birds flying in formation – with singular purpose, they move faster together than they would alone. To carry out this strategy, SoftBank Corp has acquired numerous companies over the past 20 years, and has raised more than $100 billion for its pair of Vision Funds, which invest in startups and public tech companies.
The result is a network of more than 100 companies, all tied to the central SoftBank hub, and often, inter-connected to each other through various business relationships.
The cooperating companies strategy isn’t without some danger. Son has said he expects that 15 of Vision Fund I’s investments could fail, which could lead to ripple effects across the portfolio. Supply chain-financed focused Greensill, for example, is preparing to file for the UK equivalent of bankruptcy and sell off a large part of its business, which could wipe out SoftBank’s investment, the FT reported Wednesday.
Much like tallying the tens of thousands of jobs lost in the last year at SoftBank-backed companies, it’s impossible to track every way in which the investor’s portfolio companies overlap. But a review by Insider offers the first comprehensive accounting of myriad vendor and partner relationships among the global companies.
SoftBank backed more than 130 tech-related companies. Here are 43 of them, like supply chain finance company Greensill.
SoftBank, the investor
SoftBank invested in funds that loaned money to four of its startups in deals arranged by Greensill, giving SoftBank ties to the lender, the borrowers, and the broker.
In another deal, Greensill canceled $435 million of debt in exchange for a 5% stake in Katerra, part of a larger SoftBank bailout for the construction startup.
SoftBank also has a controlling stake in WeWork and encouraged its other investments to work with them.
One of those was SoftBank-owned Sprint: Son pushed WeWork to build Sprint a new US headquarters, despite pushback from a top Sprint executive, per a source who said it “made no sense” for either side – Sprint (since merged with T-Mobile) was cutting costs and WeWork lost money.
Pre-pandemic, about 25,000 employees at SoftBank-backed companies used WeWork offices, including these 10 companies.
Mapbox, which makes mapping tools for developers, is used by numerous other companies in SoftBank‘s portfolio.
More than a dozen SoftBank-backed companies use Slack.
Some partnerships happened organically: DoorDash used Slack before SoftBank led the delivery company’s Series D fundraising in 2018.
SoftBank first used the employee management software Behavox internally before investing in the company.
SoftBank has recently launched three special purpose acquisition companies to take tech companies public. If one these SoftBank SPACs buys a Vision Fund company and takes it public, it would be the latest example of symbiosis in Son’s universe of investments.
Explore SoftBank’s web of connections by filtering for industry categories and relationship types, or select a company to learn more.
SoftBank and most of its portfolio companies declined to comment; Nauto, Fanatics, Paytm, Uber, PolicyBazaar, Ping An, Fungible, Gympass, ByteDance, and Flexport did not respond to multiple requests for comment.
In 2020, SoftBank fully exited multiple investments, including Slack and Ping An Good Doctor.
With record fundraising, SoftBank supersizes keiretsu
When the dot-com crisis hit, SoftBank’s debut fund – likely the largest late-stage venture fund at the time – didn’t seem like a promising start to 300 years of growth. Half of its startups collapsed, and the fund returned pennies on the dollar to its investors, Business Insider reported in January.
Son returned to the fundraising trail with a similar message in recent years, and this time, investors, including SoftBank itself, ponied up nearly $100 billion for the first Vision Fund. The fund has since invested in 86 companies across sectors, with founders like Adam Neumann echoing Son’s vision. In January 2019, Neumann told WeWork staff that even in 300 years, his descendants would control his office company. Neumann was ousted months later.
To help WeWork and SoftBank’s other investments realize Son’s vision for a synergistic portfolio, Vision Fund executive Gerry Lopez runs a value creation team that helps link companies together. It’s not a unique or new investment thesis – 30 years ago, venture capital firm Kleiner Perkins highlighted a strategy dubbed the Kleiner keiretsu, a Japanese word for a business network that works cooperatively.
SoftBank, with record fundraising, has supersized keiretsu, though the company maintains it does not push companies to work together. But because its portfolio companies offer such a broad array of innovative services, SoftBank argues that many companies are eager to connect.
Laura Lindsey, an associate finance professor at Arizona State University, said that even when a deal between two portfolio companies may not seem like it pencils out financially, one or both companies could benefit in the long run by using the deal as a chance to trial a new product or otherwise invest in market share.
Larger networks mean more opportunities for company matching
Son has been evasive when analysts ask specifics about how SoftBank companies cooperate.
“Masa’s been asked this question a number of times by analysts and he tends to give a very light answer to it,” said Dan Baker, a Morningstar analyst who covers SoftBank. Baker said Son tends to offer an anecdote, then move on.
“They do claim they make it a focus and if it is, they should be able to get some synergies, particularly for new companies looking for joint ventures and partnerships,” Baker said.
Lindsey, the ASU professor, wrote her 2003 dissertation on keiretsu for venture-backed companies. She said well-networked venture investors can introduce their companies to the right partners, particularly for non-public projects.
“If you’re an insider, you might be able to see how companies that might be competitors could chart a path of cooperation,” she said. “The larger your network, the more you’re going to be able to form good matches.”
Dhruv Saxena, CEO of SoftBank-backed ecommerce fulfiller ShipBob, told Bloomberg TV in September that SoftBank’s large network set it apart when his firm was considering various potential investors.
“SoftBank has a portfolio of companies all across the world. As we think about expanding our fulfillment network abroad, having relationships in those SoftBank portfolio companies stood out to us.”
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