Let’s Talk About SoftBank’s Second Vision Fund: Term Sheet
And here it is … the early development of what is bound to be a sequel to SoftBank’s debut $100 billion Vision Fund.
SoftBank is expected to pump $40 billion into its second technology-focused megafund after securing backing from an unlikely group of investors, according to The Wall Street Journal.
Apple, Goldman Sachs, and Standard Chartered are amongst some of those investors. SoftBank is also reportedly in talks with Microsoft to invest in the fund. SoftBank executives told Microsoft that they would encourage the fund’s portfolio of roughly 75 companies to transition away from Amazon Web Services to Microsoft’s cloud platform Azure, according to the story.
I’m actually quite surprised by the investors interested in participating in Vision Fund 2.0, but it’s a good lesson in how quickly narratives turn. Not so long ago, Softbank was under fire after it was revealed that Saudi Arabia provided more than half of the capital in its debut Vision Fund. (The CIA concluded that Crown Prince Mohammed bin Salman ordered the murder of journalist Jamal Khashoggi.)
I thought that the scandal had the power to freeze SoftBank out of deals, affect future Vision funds, or even tarnish Masayoshi Son’s reputation. Turns out, it really didn’t. DFJ’s Heidi Roizen made a good point about all the outrage during our interview in December:
“I think it’s fascinating that we’re focused on Saudi Arabia because of the unique circumstances around the murder of Jamal Khashoggi. And yet, if we’re really going to draw the line on all transgressions of human rights, there’s a long list of those.“
So perhaps that’s behind some of the thinking of the new investors. In fact, Saudi Arabia has indicated they are likely to invest again, though at a lower level than the $45 billion it contributed last time, according to The WSJ.
It’s also important to note that for some of these companies and banks, an investment is what it costs to gain access to an ecosystem of high-flying companies you can do business with. And what do you do when only SoftBank holds the key?
DIDI FUNDING: Toyota Motor Corp. will invest $600 million in Didi Chuxing, China’s largest ride-hailing company. The deal with Didi follows the company’s investments last year of $500 million in Uber and $1 billion in Southeast Asia’s Grab. This is another step in Toyota’s journey to evolve beyond just car manufacturing. Read more.
THE HANDMADE EMPIRE: Etsy, the e-commerce site for handmade and craftsy goods, has had quite the journey. The company, which launched in 2005, has earned cultlike devotion from sellers and buyers alike for its “keeping commerce human” ethos and its focus on small vendors rather than big corporate conglomerates. But Etsy is enjoying a striking turnaround, thanks in part to an effort to give customers the consistent, reliable experience they’d expect from … a big corporate conglomerate. Read Fortune’s feature here.
HOUSEKEEPING: I’ll be out of the office tomorrow and Monday, so my colleague Lucinda Shen will be in charge of compiling the deals and keeping you up to date. Please send deals and scoops her way at lucinda.shen@fortune.com.