The biggest backer of unicorn real estate startups on earth is looking to add $15 billion to its pot.
Japanese conglomerate SoftBank is in talks with investors to add another $15 billion to their already huge $100 billion Vision Fund, and are considering raising capital for a second fund, according to Bloomberg.
Since 2017, Masayoshi Son’s SoftBank has used its Vision Fund to invest $70 billion in technology start-ups, including office-leasing giant WeWork — now called the We Companies — and brokerage Compass. Son previously stated that he aims to raise a new $100 billion fund every two or three years.
The sovereign wealth funds of Saudi Arabia and Abu Dhabi have so far provided the main capital backing, and Softbank may ask them to waive their rights to debt repayments going forward, sources told Bloomberg. SoftBank is also considering ways to reinvest profits, raise more capital, or take out loans.
Softbank’s backing of WeWork and Compass has allowed those companies to make significant acquisitions in the last year. WeWork has expanded its suite of office services by buying up smaller startups, while Compass has acquired other resi brokerages, including Pacific Union in California, and Stribling & Associates in New York City. In September, the Vision Fund and the Qatar Investment Authority raised a $400 million round for Compass, giving the brokerage a $4.4 billion valuation.
There has been some tension amongst the Vision Fund’s investors over WeWork, however.
In December, the Wall Street Journal reported that the Vision Fund’s sovereign wealth funds had balked at the prospect of investing another $16 billion in the co-working company, which would have given SoftBank a majority stake, buying out Neumann’s other investors. Son’s SoftBank Group independently deployed $2 billion instead, giving the co-working company a $47 billion valuation. [Bloomberg] – Decca Muldowney