5 things to know about Compass and WeWork’s biggest backer

Masayoshi Son invested $36B in startups in 2017

TRD New York /
Jan.January 02, 2018 03:10 PM

From left: Robert Reffkin, Adam Neumann and Masayoshi Son

Masayoshi Son’s SoftBank Vision Fund committed almost $5 billion to real estate startups WeWork and Compass in 2017 — and that’s just a drop in the bucket. With $93 billion in capital raised, Son has been showering startups with cash, whether they want it or not. A new Bloomberg profile takes readers behind the scenes of the Japanese mogul’s delmaking spree. Here are five key takeaways:

He’s not afraid to play hardball

In some cases, Son convinced startups to take his money by threatening to fund rivals if they refused. In early 2017 Cheng Wei, founder of the ride hailing company Didi Chuxing, told Son that he didn’t need any more money because the company had already raised $10 billion. Son told him in that case he might decide to give his money to a competitor instead, Bloomberg reported. Wei relented and raised $5 billion from SoftBank.

His $100B Vision Fund is backed heavily by Saudi Arabia’s royal family

In September 2016, Saudi Arabia’s crown prince Mohammed bin Salman met Son in Tokyo. Less than an hour into the meeting he agreed to become a key investor in what Son pitched as the biggest venture capital fund in history. “Forty-five minutes, $45 billion,” Son later said on the David Rubenstein Show. “One billion dollars per minute.”

His early bet on Alibaba is now valued at $129B

Son’s biggest success to date was his investment in the Chinese e-commerce company Alibaba, starting with a $20 million check in 2000. Today Son’s stake is worth around $129 billion, according to Bloomberg. “You may think, ‘you were lucky because you hit upon Alibaba,’” he said at a July conference. “That’s true. I’m really, really grateful to Jack Ma. It was not just one lucky hit. Perhaps if you continue with lucky hits then it’s your capability. Maybe I’m smart after all!’’

He invested about $36B in tech startups in 2017

SoftBank invested $36 billion in tech startups across 100 deals in 2017, according to Preqin — more money than Sequoia Capital and Silver Lake combined. Son placed outsized bets on real estate startups, committing $4.4 billion to WeWork in August and $450 million to Compass in December.

He tends to go it alone

While other venture capital firms have several crucial executives, SoftBank is a one-man show. He prefers to meet entrepreneurs in person and is the only so-called key man in the SoftBank Vision Fund’s contracts with investors. “It’s 100 percent Masa,” one entrepreneur who raised money from Son told Bloomberg. “Okay, 99.9 percent Masa.” [Bloomberg]Konrad Putzier 

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