#19. Softbank: Go Big and Never Go Home
Welcome! Issue #19 of Emerging Markets explorer 🧠profiles the Japanese giant Softbank - a company you need to know: they have disrupted the technology and VC industry worldwide. Read the full profile here.
If you wonder what Emerging Markets explorer 🧠is, start here.
Softbank
There are two things you need to know about Softbank:
They are big. You’ll become desensitized by the huge numbers and actions as you read about them. Fine. But after you read this, when you hear of investment rounds or bold strategies, assume that Softbank made it bigger until proven otherwise. You’ll be seldom proven otherwise. And that’s the catch.
They are consistent with Masa’s vision, succeeding or failing. Masa is the founder and president, and he created the company at the age of 24 thinking of a category that would grow in the following 50 years. He wants to make people happy through the Information Revolution.
If you want to dive deeper into these principles, in the piece, you’ll get to know:
What is really Softbank? It gets confusing, it’s good to have a base
Who is Masayoshi Son and why is his name not as famous as Steve Jobs?
Masa is cool… but who else is on board in Softbank?
What are the Vision Funds and why are they so hated on? Also will cover the Latin America Fund, which happened to double the VC investable amount in Latin America.
Read it here: Softbank, Go Big and Never Go Home.
Failure stories: a bumpy ride for Softbank
The consistency and size of Softbank’s actions have inevitably led to mistakes and failures. Softbank has broken records for success stories as well as for failures.
One of the reasons behind Masayoshi Son’s anonymity in the West is because his net worth has taken big swings. Masa is the biggest stakeholder of Softbank, and in the 2000s, Softbank was valued at $70BN, and he was the richest man in the world. However, after the dot-com bubble burst, Softbank’s value plummeted to $600M, and Masa lost more money than anyone in the history of the world.
He recovered after, and by 2006 they acquired Vodafone Japan and ensured exclusive distribution rights for the iPhone in Japan.
The Vision Funds are not free of failure either. Vision Fund invested in WeWork, which yielded losses of $17.7BN. In 2020 Softbank group reported losses of $12BN fueled mostly by the Vision Fund I losses. This made that the Vision Fund II, that has been launched in 2021, not reach the size target: they were aiming at $100BN, but only raised $30BN, $10BN of which come from Softbank.
However, SoftBank’s Vision Fund investment arm went from being the source of the biggest loss in SoftBank’s history a year ago to the main driver of earnings, with a $46BN profit in 2020, as reported in March 2021. They broke the record of the largest profit reported for a Japanese firm.
Sources to dive deeper…
If you want to know more, you can read the full profile here.
And if you want further perspectives because you got as excited as me:
The 1992 interview of Harvard Business Review with Masa. I wasn’t blinking the whole time I was reading.
Read it here: https://hbr.org/1992/01/japanese-style-entrepreneurship-an-interview-with-softbanks-ceo-masayoshi-son
The Annual Reports of Softbank: along with financial statements, they publish annual reviews. These show the consistency of Softbank’s vision.
Find them here: https://group.softbank/en/ir/financials/annual_reports
Masa madness, of Not Boring. Packy explores many angles of Softbank in this piece. It was published in September 2020, in the time when WeWork had failed and all the calls of the 555 Fund had been discovered.
Read it here: https://www.notboring.co/p/masa-madness-3cb
Listen to it here:Â