Softbank’s pledge for a $100 billion fund will challenge bankers

Many business titans have made the trek to Trump Tower for a private audience with Donald Trump since he was elected president, but none have made a bigger splash than Masayoshi Son, a billionaire telecommunications entrepreneur.

“Ladies and gentlemen, this is Masa of SoftBank of Japan and he has just agreed to invest
$50 billion in the U.S. and 50,000 jobs,” Trump said, wrapping an arm around the beaming
Son last month.

That pledge suggested a wave of money pouring into technology startups in Silicon Valley.
And it is part of a hugely ambitious $100 billion investment fund — the SoftBank Vision Fund— that Son announced in October.

Bankers say that more than threequarters of the fund’s resources will be directed toward
larger investments in private and public markets, rather than into startups.

That could mean swooping in to grab a piece of an undervalued technology company trading on the stock exchange or doing a largescale private equity deal.

That’s because investing in technology startups is usually constrained by the sector’s ability to absorb large sums, with $1 billion generally considered the very upper limit. In the parlance of finance, money does not scale.

These bankers say that the fund — which has $45 billion from Saudi Arabia, $25 billion from SoftBank and smaller contributions from Apple, Lawrence Ellison of Oracle and others — will also be looking at smaller venture capital forays in artificial intelligence, robotics and financial technology. But, given the fund’s size, the major bets will be on large companies.

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