In 2017, SoftBank launched its $100 billion Vision Fund that shocked many and set sky high expectations for the venture industry.
The company’s method of investing huge amounts into its portfolio companies, creating a “money moat” against competitors, seemed unconventional for good reason.
Because of this, the Vision Fund has seen a mountain of its companies burnout and lose billions in valuations.
One of the most significant of these businesses was WeWork’s parent company The We Company, which SoftBank had invested upwards of $18.5 billion.
After the coworking firm’s profitability came into question, its attempt to go public failed miserably, forcing cofounder Adam Neumann to step down, and SoftBank to hit the brakes on its contributions.
Despite this and numerous other challenges the Vision Fund has faced in recent years, leaders say that there is an attempt to amend these downfalls with its second fund, which was announced in July of 2019.
While the WeWork debacle caused investments to slow, the Vision Fund 2 has been able to grow its investment pace over the last quarter. These funding rounds include a $775 million Series A into technology commerce firm Perch and a $676 million Series D into SambaNova Systems.
“The biggest learning is not to be concentrated,” said Navneet Govil, managing partner and CFO at the Vision Fund. “The differences are that we’re doing a lot smaller ticket sizes. It’s not the large multibillion-dollar ticket size.”
