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I don't know a huge amount about SoftBank - but what have they backed that's successful / working / making a profit? They seemed to be attached to (at least in

by iamben 6y ago

I don't know a huge amount about SoftBank - but what have they backed that's successful / working / making a profit? They seemed to be attached to (at least in my 'bubble') a lot of stories about failing or troubled companies and I rarely see a "SoftBank backed XYZ does amazing things!" (although I appreciate there's a journalistic angle here). Edit: Thanks replies! Definitely seems like a bias in reporting here :-)

xiphias2 6y ago
Right now Bytedance (TikTok) is their top winner. Their stock just doubled last year, so they are not as bad as their reputation. It looks just biased media to me at this point.
- ma2rten 6y ago
  To be fair, a lot of stocks have doubled in the last year and softbank as a company does more than investing.
marc__1 6y ago
There is a lot of data out there given they are publicly traded, although I don't like their presentations: [0] 13 IPOs for Vision Funds I and II Fair Value of both funds: $116.7b Investment Gains: $27.6b Dry Powder: $19.5b Distribution to LPs: $15.2b 'SoftBank backed does amazing things' is always relative especially because the failures are much more media-friendly. Case in point: There are only 7 posts on Guardant Health on HN. What they are doing in liquid biopsy for cancer treatment is remarkable, and yet we never comment on that. [0] https://group.softbank/system/files/pdf/ir/presentations/2020/investor-svf_q3fy2020_01_en.pdf https://group.softbank/system/files/pdf/ir/presentations/202...
- itsoktocry 6y ago
  >13 IPOs for Vision Funds I and II An IPO, in-and-of-itself, isn't a "success". In fact, I'd fathom that at least half the time it's insiders dumping garbage on the public.
  - darkwizard42 6y ago
    Actually in the case of GP and GGP comment, this is EXACTLY what represents a financial success. If Softbank was able to exit their position through IPO and the company delivered great returns then Softbank's investment was a success. Your sentiment is very broad and repeatedly echoed across HN, but in this comment chain it doesn't make any sense because they are asking about "making a profit"
  - marc__1 6y ago
    > I'd fathom that at least half the time it's insiders dumping garbage on the public What is the data you have to back this? Goldman Sachs analyzed 4,481 U.S. IPOs over the past 25 years and this is one of their conclusions: "Since 2010, IPOs with annual sales growth greater than 20% have been more likely to outperform Russell 3000 over three years than a comparable, slower-growing IPO" Jay Ritter, professor at University of Florida, has a great table [1] that shows that companies with $100m in ARR who IPOed from 1980-2018 (n=3,299) have an average of 40.8% in returns on a buy and hold strategy 3 years after IPO, compared to 0.8% from the market. More data here: [0] https://www.barrons.com/articles/money-losing-ipo-stocks-can-still-be-winners-look-at-the-data-51567764900 https://www.barrons.com/articles/money-losing-ipo-stocks-can... [1] https://site.warrington.ufl.edu/ritter/files/IPO-Statistics.pdf https://site.warrington.ufl.edu/ritter/files/IPO-Statistics.... https://www.goldmansachs.com/insights/pages/top-of-mind/the-ipo-spac-tacle/report.pdf https://www.goldmansachs.com/insights/pages/top-of-mind/the-... https://site.warrington.ufl.edu/ritter/files/2015/06/Why-Has-IPO-Underpricing-Changed-Over-Time-2004.pdf https://site.warrington.ufl.edu/ritter/files/2015/06/Why-Has...
dataminer 6y ago
Alibaba
oli5679 6y ago
The founder was an early backer of Alibaba. This had a phenomenal ROI but has a sample size of 1. They paid a high price to purchase ARM, which has since been very successful. I would be interested in an ROI breakdown for different time windows. I agree they have backed several high profile implosions.
- robert_foss 6y ago
  Well... ARM has been very successful for the last 20 years.
  - gumby 6y ago
    But SoftBank hasn’t owned it for 20 years.
    - robert_foss 6y ago
      That's what I'm saying. SoftBank has nothing to do with ARMs success. Nor was buying ARM a particularly inspired buy.
boringg 6y ago
Softbank made an interesting playbook. They made a bet that given their fund size (magnitude order larger then VC funding at the time) they could find large scale opportunities fund those companies and outlast longer and out muscle the competition based largely on size of capital alone. I.e. hold on to losses before the competitors ran out of gas and then take market share. As a result competition has had to up the amount of funding sizes so that they can compete with Softbank investments or risk not being able to keep marketshare. Also creates some really perverse incentives in that you can sustain an unsustainable business model much longer driving out other businesses/competition at the same time then VC traditional could. It is a pretty big bet and has lots of capital in the mix - founder of Softbank has a history of high risk bets (not always going well either I would add).
- marc__1 6y ago
  > can sustain an unsustainable business model much longer What is the data you have to back that any of these business are unsustainable: Uber, Guardant Health, Doordash, 10X Genomics, Slack, Opendoor, Seer, Beike? I don't and the broader market neither. If you do, shorting is a great strategy to give you an outsize payoff
  - boringg 6y ago
    Unsustainable was the wrong word. Correction -->. "can sustain a higher cash burn for longer before getting to revenue positive"
  - nmfisher 6y ago
    Last I checked, Uber, DoorDash and Slack weren’t profitable (and I don’t know about the others). Doesn’t that mean there’s some truth to that comment?

by iamben 6y ago

xiphias2 6y ago

Right now Bytedance (TikTok) is their top winner. Their stock just doubled last year, so they are not as bad as their reputation. It looks just biased media to me at this point.

ma2rten 6y ago
To be fair, a lot of stocks have doubled in the last year and softbank as a company does more than investing.

marc__1 6y ago

There is a lot of data out there given they are publicly traded, although I don't like their presentations: [0] 13 IPOs for Vision Funds I and II Fair Value of both funds: $116.7b Investment Gains: $27.6b Dry Powder: $19.5b Distribution to LPs: $15.2b 'SoftBank backed does amazing things' is always relative especially because the failures are much more media-friendly. Case in point: There are only 7 posts on Guardant Health on HN. What they are doing in liquid biopsy for cancer treatment is remarkable, and yet we never comment on that. [0] https://group.softbank/system/files/pdf/ir/presentations/2020/investor-svf_q3fy2020_01_en.pdf https://group.softbank/system/files/pdf/ir/presentations/202...

itsoktocry 6y ago
>13 IPOs for Vision Funds I and II An IPO, in-and-of-itself, isn't a "success". In fact, I'd fathom that at least half the time it's insiders dumping garbage on the public.
- darkwizard42 6y ago
  Actually in the case of GP and GGP comment, this is EXACTLY what represents a financial success. If Softbank was able to exit their position through IPO and the company delivered great returns then Softbank's investment was a success. Your sentiment is very broad and repeatedly echoed across HN, but in this comment chain it doesn't make any sense because they are asking about "making a profit"
- marc__1 6y ago
  > I'd fathom that at least half the time it's insiders dumping garbage on the public What is the data you have to back this? Goldman Sachs analyzed 4,481 U.S. IPOs over the past 25 years and this is one of their conclusions: "Since 2010, IPOs with annual sales growth greater than 20% have been more likely to outperform Russell 3000 over three years than a comparable, slower-growing IPO" Jay Ritter, professor at University of Florida, has a great table [1] that shows that companies with $100m in ARR who IPOed from 1980-2018 (n=3,299) have an average of 40.8% in returns on a buy and hold strategy 3 years after IPO, compared to 0.8% from the market. More data here: [0] https://www.barrons.com/articles/money-losing-ipo-stocks-can-still-be-winners-look-at-the-data-51567764900 https://www.barrons.com/articles/money-losing-ipo-stocks-can... [1] https://site.warrington.ufl.edu/ritter/files/IPO-Statistics.pdf https://site.warrington.ufl.edu/ritter/files/IPO-Statistics.... https://www.goldmansachs.com/insights/pages/top-of-mind/the-ipo-spac-tacle/report.pdf https://www.goldmansachs.com/insights/pages/top-of-mind/the-... https://site.warrington.ufl.edu/ritter/files/2015/06/Why-Has-IPO-Underpricing-Changed-Over-Time-2004.pdf https://site.warrington.ufl.edu/ritter/files/2015/06/Why-Has...

dataminer 6y ago

Alibaba

oli5679 6y ago

The founder was an early backer of Alibaba. This had a phenomenal ROI but has a sample size of 1. They paid a high price to purchase ARM, which has since been very successful. I would be interested in an ROI breakdown for different time windows. I agree they have backed several high profile implosions.

robert_foss 6y ago
Well... ARM has been very successful for the last 20 years.
- gumby 6y ago
  But SoftBank hasn’t owned it for 20 years.
  - robert_foss 6y ago
    That's what I'm saying. SoftBank has nothing to do with ARMs success. Nor was buying ARM a particularly inspired buy.

boringg 6y ago

Softbank made an interesting playbook. They made a bet that given their fund size (magnitude order larger then VC funding at the time) they could find large scale opportunities fund those companies and outlast longer and out muscle the competition based largely on size of capital alone. I.e. hold on to losses before the competitors ran out of gas and then take market share. As a result competition has had to up the amount of funding sizes so that they can compete with Softbank investments or risk not being able to keep marketshare. Also creates some really perverse incentives in that you can sustain an unsustainable business model much longer driving out other businesses/competition at the same time then VC traditional could. It is a pretty big bet and has lots of capital in the mix - founder of Softbank has a history of high risk bets (not always going well either I would add).

marc__1 6y ago
> can sustain an unsustainable business model much longer What is the data you have to back that any of these business are unsustainable: Uber, Guardant Health, Doordash, 10X Genomics, Slack, Opendoor, Seer, Beike? I don't and the broader market neither. If you do, shorting is a great strategy to give you an outsize payoff
- boringg 6y ago
  Unsustainable was the wrong word. Correction -->. "can sustain a higher cash burn for longer before getting to revenue positive"
- nmfisher 6y ago
  Last I checked, Uber, DoorDash and Slack weren’t profitable (and I don’t know about the others). Doesn’t that mean there’s some truth to that comment?