It’s been a busy year for the Japanese conglomerate bank, SoftBank. From raising their Vision Fund to investing in several startups, then more recently, bailing out the near-collapse space renting company, WeWork. SoftBank has been heavily investing in WeWork, but according to sources, things are set to change.
Following a series of investments gone wrong, the multinational bank has decided to clamp down on the freedom and space it affords the owners of the companies it invests in. A source said the bank’s CEO Masayoshi Son is a man on a mission to change his way of doing business, with plans underway to concentrate the bank’s investments in companies with clearer pathways to success.
Among his new strategies is slowing down on their investment appetite, even as they plan for Vision Fund 2. Compared to Vision Fund 1 that raised about $100 billion and spent 80% of that amount within 3 years, the second round of funding will only be spent on truly viable investments, the source said.
SoftBank has resolved to buy stakes in companies with quicker profitability strategies. The change came as a result of the market’s response to SoftBank’s past investments. Other than WeWork’s failed IPO, SoftBank is also haunted by the lackluster performances of its other investments including Slack and Uber, placing the multinational bank’s strategists under a Microscope.
Son is also said to be planning to take a more active role in the selection of the companies to invest in once they secure their second round of funding. However, the anonymous source stated that the CEO’s decision to participate in the vetting of potential investments might only be temporary until the market conditions shift positively.
But even in the midst of strong criticism on the manner in which the bank has been making its investments, CEO Son is still positive that the Vision Fund is making a positive return on its investments. The executive who spoke last month at the Future Investment Initiative conference in Riyadh, Saudi Arabia, said it would not stop funding startups to enable them to “grow much bigger and quicker.” “We identify the entrepreneurs who have the greatest vision to solve the unsolvable,” he added.