Record Earnings for the Firm

With its earnings announcement last week, SoftBank Group put an exclamation point on its seemingly miraculous 180 from being mired in the WeWork debacle. The financial firm, led by eccentric visionary Masayoshi Son, set records for Japanese companies when it reported annual net income of $46 billion based primarily on returns from SoftBank investments. For comparison, Google’s parent company Alphabet generated $40 billion in net income for 2020. 

Driving this success was SoftBank’s venture capital arm, with SoftBank’s Vision Fund logging unprecedented gains due to the warm investor reception of IPOs from Coupang (a South Korean eCommerce company) and DoorDash (the US food delivery service). It is believed SoftBank’s 37% stake in Coupang, now worth $30 billion, was acquired for an original investment of $3 billion--a pretty astounding 10X return. 

So what has the venture giant been up to recently? 2021 has seen SoftBank’s VC activity keep with its approach of large bets in late rounds as it hopes to supercharge unicorns before they go public.

SoftBank Investments in 2021

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Coming from its Latin American Fund and Vision Fund 2, SoftBank led 4 of the 9 rounds it has participated in thus far in 2021, fueling expansion for companies in a wide array of sectors: 

• Better.com (April) -  SoftBank quarterbacked the $500M Series E for the digital mortgage lender. The Japanese conglomerate  is reportedly buying shares from existing investors ahead of a potential IPO this year.
• Tempo (April) - SoftBank led the $220M Series C for the home gym startup. Personal fitness is heating up with competitor Tonal raising as well in a market already led by Peloton and Mirror.
• Manticore Games (March) - The second-layer gaming platform raised $100M in a Series C round in which SoftBank was a participant. The race is on to capture the demographic (reportedly half of all US children age 9-12!) aging out of Roblox. 
• GoPuff (March) - SoftBank wasn’t the lead but almost certainly put up significant capital from its Vision Fund in this massive $1.2B round. The instant delivery disruptor raised money from VCs and big institutional investors alike in a Series G, signaling a final push before going public.
• ElevateBio (March) - SoftBank was a secondary investor in the Series C for the gene therapy company. The Cambridge, MA-based company plans to use the $525M to continue developing its own therapies while growing industry partnerships. 
• Insitro (March) - Softbank was part of a group of investors in the $400M Series C round for the AI-focused drug discovery company which currently counts partnerships with Gilead and Bristol Myers Squibb. 
• Klook (January) - SoftBank participated in the $200M Series E meant to sure up the Hong Kong-based travel activities platform after a relatively successful rebound from the worst of the pandemic.
• Keep (January) - The Chinese fitness class provider raised $360M in a Series F round led by SoftBank. The company is building an ecosystem selling consumer products to its avid users (360M and rising).
• MadeiraMadeira (January) - SoftBank led the $190M in late stage financing for “Brazil’s Wayfair.” The pandemic accelerated eCommerce in Brazil, buoying the furniture and home goods platform. 

The sheer size of SoftBank’s original Vision Fund, $100 billion of dry powder, immediately disrupted the VC space when it closed fundraising in 2017. The size, 50-100X more than many of the traditional players, created an attractive option for startups raising late stage capital. And while there have been some notable hiccups among SoftBank’s investments (most recently Greensill), the latest earnings report does lend credence to SoftBank’s overall VC strategy of fueling massive capital advantages in hot markets. 

For these startups, the question becomes: will they head the way of WeWork or be the next Coupang?

This data was put together with the VC Deals App. To explore the data further, check it out!