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Can someone knowledgeable explain SoftBank? Is it partly a Japanese sovereign fund...I've become less and less interested in its investments as it seems to simp

Can someone knowledgeable explain SoftBank? Is it partly a Japanese sovereign fund...I've become less and less interested in its investments as it seems to simply act like a giant government money channel with questionable investments that don't seem to make sense from a typical VC/PE perspective. Ie is its ultimate goal not merely profit?

alephnerd 2y ago
It's an investment company that primarily specializes in Telecom and telecom adjacent industries (eg. Internet companies, Energy, Space Tech, Hardware). Most people on HN have only heard of SoftBank's Vision Fund, but that's basically an autonomous organization within SoftBank staffed with Deustche Bank alumni who left in droves in 2017-2020. > Ie is its ultimate goal not merely profit? Yes. Their goal is profit. > I've become less and less interested in its investments as it seems to simply act like a giant government money channel with questionable investments that don't seem to make sense from a typical VC/PE perspective This investment is part of their strategy for 6G and IIoT, which is synergistic with their telecom focus. There has been work over the past 4-5 years to become the leader for creating the standards for 6G, and SoftBank is trying to position themselves to be that player.
- alephnerd 2y ago
  ^ Left DB (not SoftBank) in droves. SoftBank is relatively hands off compared to most Japanese firms. Son's experience at Cal (go bears!) def helped MunichRe is trying the same strategy. You'll see their name in the next 10 years just like SoftBank ;)
re-thc 2y ago
> Ie is its ultimate goal not merely profit? This isn't the vision fund or any of those VC initiatives from SoftBank. I'd see this as SoftBank who owns ARM is now buying something useful in the same group / segment to consolidate. Having said that interest in Japan is at record lows (compared to the rest of the world) so financing is a lot easier.
alberth 2y ago
It's just a VC. But it's so big (maybe biggest in the world), so its reach and influence is immense. And as a result, it has raised money from nations and other enormous entities. Run by Masa who many consider an oracle because his placed massive bets years before other people and those bets have paid of big.
- hn_throwaway_99 2y ago
  > Run by Masa who many consider an oracle because his placed massive bets years before other people and those bets have paid of big. I'm not sure how many folks these days would consider him an "oracle". He clearly did fabulously well with some early Internet investments, but he also was famous for folly after folly of overpriced investments in the 2010s (the Softbank "Vision Funds"). I'd be curious if there is a simple accounting list of Softbank's major investments ranked from biggest winners to biggest losers. I guess it pretty much highlights the dynamics of the VC business model - you only need a few giant winners to offset the boatload of losers. In Softbank's case, I'm guessing their biggest winners are Yahoo Japan (which was the dominate site in Japan for a long time, and long after the US Yahoo fell into irrelevance) and Alibaba, which saw their early $20 million investment balloon into billions. But did Softbank have any winners from their 2010s spending spree (along the time where they shoveled good money after bad into WeWork)?
  - alberth 2y ago
    He made a big bet on NVIDIA when no one else did. (Though he sold too soon and missed out)
  - jonas21 2y ago
    They've made close to $100B on ARM (which they acquired in 2016). This dwarfs the $14B they lost on WeWork. Of course WeWork gets far more attention because it's a such an entertaining story.
    - hn_throwaway_99 2y ago
      Thanks very much, I had forgotten about ARM. The Vision Fund lost on tons more companies than just WeWork though. But your overall point is correct - there were a couple outsized winners (also just found another article that they made a huge gain on DoorDash) that I'm guessing took care of the majority of their losses.
jawiggins 2y ago
SoftBank was founded by Masayoshi Son. It was originally a tech company that resold software (imagine Steam but for desktop apps), but very quickly it morphed into something like a PE firm that would do continual leveraged buyouts of existing firms. They've bought companies that run conferences, tech magazines, one of their more formative M & A deals was to buy the Japanese Vodafone arm. Many of these deals actually went pretty poorly, with Masayoshi overpaying for the firms he bought and then being saddled with very large debts to repay the loans. Masa was wiped out and faced bankruptcy multiple times. Later on the would move away from leveraged buyouts and start investing in startups more similar to how a VC firm would in the US. He notably invested early in Yahoo and Alibaba. The company is not a sovereign fund - it's really run at the behest of it's founder. If you want to read more about the story, there was recently a great biography that chronicled the story: Gambling Man (https://www.amazon.com/Gambling-Man-Greatest-Disruptor-Masayoshi/dp/166807074X https://www.amazon.com/Gambling-Man-Greatest-Disruptor-Masay...)
- flakiness 2y ago
  And it's so un-Japanese. See what the Japanese government (or old power in Japan) has been spending the money on recently: - Honda-Nissan merger (failed) - Seven Eleven counter buyout https://www.wsj.com/business/retail/the-fight-for-7-eleven-isnt-just-about-money-d1af6db9 https://www.wsj.com/business/retail/the-fight-for-7-eleven-i... Masayoshi Son is in a different league, for good or bad.
  - alephnerd 2y ago
    > old power in Japan) has been spending the money on recently Investing in SoftBank. MUFG, the Custody Bank, and Master Trust all have significant ownership stakes in SoftBank, and most Japanese conglomerates like NTT, NEC, etc tend to work closely with SoftBank on strategic deals
    - flakiness 2y ago
      Wow I thought the Softbank money came from mostly overseas. Good to know. (Drop me some reference links if you don't mind.)

alephnerd 2y ago

It's an investment company that primarily specializes in Telecom and telecom adjacent industries (eg. Internet companies, Energy, Space Tech, Hardware). Most people on HN have only heard of SoftBank's Vision Fund, but that's basically an autonomous organization within SoftBank staffed with Deustche Bank alumni who left in droves in 2017-2020. > Ie is its ultimate goal not merely profit? Yes. Their goal is profit. > I've become less and less interested in its investments as it seems to simply act like a giant government money channel with questionable investments that don't seem to make sense from a typical VC/PE perspective This investment is part of their strategy for 6G and IIoT, which is synergistic with their telecom focus. There has been work over the past 4-5 years to become the leader for creating the standards for 6G, and SoftBank is trying to position themselves to be that player.

alephnerd 2y ago
^ Left DB (not SoftBank) in droves. SoftBank is relatively hands off compared to most Japanese firms. Son's experience at Cal (go bears!) def helped MunichRe is trying the same strategy. You'll see their name in the next 10 years just like SoftBank ;)

re-thc 2y ago

> Ie is its ultimate goal not merely profit? This isn't the vision fund or any of those VC initiatives from SoftBank. I'd see this as SoftBank who owns ARM is now buying something useful in the same group / segment to consolidate. Having said that interest in Japan is at record lows (compared to the rest of the world) so financing is a lot easier.

alberth 2y ago

It's just a VC. But it's so big (maybe biggest in the world), so its reach and influence is immense. And as a result, it has raised money from nations and other enormous entities. Run by Masa who many consider an oracle because his placed massive bets years before other people and those bets have paid of big.

hn_throwaway_99 2y ago
> Run by Masa who many consider an oracle because his placed massive bets years before other people and those bets have paid of big. I'm not sure how many folks these days would consider him an "oracle". He clearly did fabulously well with some early Internet investments, but he also was famous for folly after folly of overpriced investments in the 2010s (the Softbank "Vision Funds"). I'd be curious if there is a simple accounting list of Softbank's major investments ranked from biggest winners to biggest losers. I guess it pretty much highlights the dynamics of the VC business model - you only need a few giant winners to offset the boatload of losers. In Softbank's case, I'm guessing their biggest winners are Yahoo Japan (which was the dominate site in Japan for a long time, and long after the US Yahoo fell into irrelevance) and Alibaba, which saw their early $20 million investment balloon into billions. But did Softbank have any winners from their 2010s spending spree (along the time where they shoveled good money after bad into WeWork)?
- alberth 2y ago
  He made a big bet on NVIDIA when no one else did. (Though he sold too soon and missed out)
- jonas21 2y ago
  They've made close to $100B on ARM (which they acquired in 2016). This dwarfs the $14B they lost on WeWork. Of course WeWork gets far more attention because it's a such an entertaining story.
  - hn_throwaway_99 2y ago
    Thanks very much, I had forgotten about ARM. The Vision Fund lost on tons more companies than just WeWork though. But your overall point is correct - there were a couple outsized winners (also just found another article that they made a huge gain on DoorDash) that I'm guessing took care of the majority of their losses.

jawiggins 2y ago

SoftBank was founded by Masayoshi Son. It was originally a tech company that resold software (imagine Steam but for desktop apps), but very quickly it morphed into something like a PE firm that would do continual leveraged buyouts of existing firms. They've bought companies that run conferences, tech magazines, one of their more formative M & A deals was to buy the Japanese Vodafone arm. Many of these deals actually went pretty poorly, with Masayoshi overpaying for the firms he bought and then being saddled with very large debts to repay the loans. Masa was wiped out and faced bankruptcy multiple times. Later on the would move away from leveraged buyouts and start investing in startups more similar to how a VC firm would in the US. He notably invested early in Yahoo and Alibaba. The company is not a sovereign fund - it's really run at the behest of it's founder. If you want to read more about the story, there was recently a great biography that chronicled the story: Gambling Man (https://www.amazon.com/Gambling-Man-Greatest-Disruptor-Masayoshi/dp/166807074X https://www.amazon.com/Gambling-Man-Greatest-Disruptor-Masay...)

flakiness 2y ago
And it's so un-Japanese. See what the Japanese government (or old power in Japan) has been spending the money on recently: - Honda-Nissan merger (failed) - Seven Eleven counter buyout https://www.wsj.com/business/retail/the-fight-for-7-eleven-isnt-just-about-money-d1af6db9 https://www.wsj.com/business/retail/the-fight-for-7-eleven-i... Masayoshi Son is in a different league, for good or bad.
- alephnerd 2y ago
  > old power in Japan) has been spending the money on recently Investing in SoftBank. MUFG, the Custody Bank, and Master Trust all have significant ownership stakes in SoftBank, and most Japanese conglomerates like NTT, NEC, etc tend to work closely with SoftBank on strategic deals
  - flakiness 2y ago
    Wow I thought the Softbank money came from mostly overseas. Good to know. (Drop me some reference links if you don't mind.)