SoftBank Keeps Minting Billionaires Despite WeWork-Sized Misses

Masayoshi Son has blundered on WeWork, Greensill and Wirecard, but SoftBank has still become one of the world’s greatest billionaire factories

Masayoshi Son has made his share of embarrassing mistakes.

His SoftBank Group forked out billions of dollars to Adam Neumann’s WeWork, taking a massive hit when it imploded. It bet that Lex Greensill, who Son called the “money guy,” would revolutionize finance. And it lent its backing to German payments company Wirecard.

Despite those fiascos, Son has never been more successful.

In March, South Korea’s Coupang had a blockbuster listing in New York, propelling co-founder Bom Kim’s wealth to $8.6 billion after the first trading day. Coupang contributed $24.5 billion to the Vision Fund’s profit. In February, used-car marketplace Auto1 Group surged on its debut, months after delivery platform DoorDash soared as much as 92% on its first day. SoftBank’s $680 million investment was worth $9 billion as of February.

SoftBank's Golden Eggs

Valuations have surged at startups backed by Son

Note: Based on data retrieved May 7

Source: CB Insights, company filings, media reports

The spectacular returns cemented Son’s reputation as one of Asia’s most influential startup financiers, whose companies straddle the global sharing economy and social media.

“I’m grateful that there are a few investors that really have not only the means to be long term, but have the guts to be long term,” Kim said of SoftBank in 2019.

More investments may go public soon. Son has predicted as many as 20 initial public offerings a year from SoftBank’s portfolio of roughly 160 startups.

Some of the most anticipated include Singapore’s Grab Holdings, ByteDance, the world’s most valuable startup, and China’s ride-hailing giant Didi Chuxing Technology.

“Son has always been like a ‘go big or go home’ type of guy,” said Justin Tang, head of Asian research at United First Partners in Singapore. “It’s in his DNA to bet big and bold.”

Son is accustomed to highs and lows. He briefly became the world’s richest man in the dot-com era—but his fortune plunged by $70 billion in 2000 in a matter of months. That same year, Son invested $20 million into Jack Ma’s Alibaba Group Holding, the then-unknown web portal. It remains his most successful investment.

Through it all, Son has stuck with a philosophy of finding charismatic entrepreneurs and giving them what they need.

After he met Yahoo founders Jerry Yang and David Filo in 1995 and discussed the future of the internet over takeout pizzas and sodas in their small office in Mountain View, California, Son decided to “bet everything on them,” according to Aiming High, a biography of Son. That led to SoftBank’s investment in Yahoo, which grew into one of America’s most heavily visited content sites.

Betting on the jockey doesn’t always work. SoftBank wrote down its $1.5 billion holding in Greensill, people familiar with the matter said in March, after booking about $18 billion in valuation losses from investments including WeWork in the previous fiscal year.

“There were times when no one was saying he was a great investor,” Tang of United First Partners said.

SoftBank began as a software distributor in Japan before pivoting into technology investing and telecommunications. In 2017 it launched the $100 billion Vision Fund, and despite the flops, it posted annual profit of $37 billion this week. SoftBank's shares still tumbled as investors worried that buybacks would dry up.

“We only live once, so I want to think big,” Son, who’s worth more than $32 billion according to the Bloomberg Billionaires Index, said in 2017. “I have no intention of making small bets.”

Stewart Butterfield (1.7 billion)
June 19, 2019
Stewart Butterfield’s workplace chat app helped shake up the white-collar world even before Covid-19 transformed the way we think about offices. Slack, credited for wiping out emails and spawning a generation of copycats, caught SoftBank’s attention in 2017, when the Japanese company’s Vision Fund led a $250 million fundraising that vaulted the app into the mainstream. Slack, which went public via a direct listing in 2019, has since struck a $27.7 billion deal to sell to Marc Benioff’s Salesforce.
Travis Kalanick (3.9 billion), Garrett Camp (3.3 billion), Ryan Graves (1.3 billion)
May 9, 2019
The mercurial Travis Kalanick’s ride-hailing titan was—at various times—both SoftBank’s biggest hit and greatest turkey. The centerpiece of Masayoshi Son’s $18 billion bet on the sharing economy, Uber used billions raised from the Vision Fund and other big-name backers to power aggressively beyond the U.S. before mounting losses forced it to withdraw from China and Southeast Asia (ceding that turf to SoftBank-backed Didi and Grab). Uber tanked on debut, but co-founders Kalanick and Garrett Camp and first employee Ryan Graves were already billionaires. Under Dara Khosrowshahi’s leadership, the company is on track to achieving profitability this year.
Christian Bertermann (1.6 billion), Hakan Koç (1.6 billion)
Feb 4, 2021
Auto1 was one of Europe’s biggest and most successful debuts this year, surging as much as 49% from the outset to fatten the fortunes of Christian Bertermann and Hakan Koç. SoftBank’s Vision Fund got in on the ground floor early in 2017, forking over 460 million euros. The German startup is now worth more than $11 billion.
Eric Wu (1 billion)
Dec 21, 2020
Eric Wu, who made his first foray into real estate as a student at the University of Arizona, survived the pandemic to go public in December via the SPAC route. The still loss-making company rolled out the welcome mat to the Vision Fund in 2018, which plonked down $400 million in a bet that a service that uses home-pricing algorithms to make rapid, all-cash offers to sellers could transform a staid industry. A plethora of startups and public companies from Zillow to Redfin are now emulating its model.
Tony Xu (2.8 billion), Andy Fang (2.6 billion), Stanley Tang (2.5 billion)
Dec 8, 2020
America’s most dominant food delivery service—it dishes up more than one in two restaurant meals across the country—extended its lead on rivals like Uber Eats during the Covid lockdowns. Tony Xu, Andy Fang and Stanley Tang are each worth more than $2 billion after starting the company more than seven years ago when they were Stanford University students, hoping to revolutionize the food industry. They snagged money from SoftBank in 2018. The Japanese powerhouse invested about $680 million for a stake in DoorDash that's now worth about $9 billion, Masayoshi Son revealed in February.
KE Holdings
Zuo Hui (11 billion), Peng Yongdong (1.4 billion)
Aug 13, 2020
Zuo Hui’s Beike, or seashells in Chinese, still stands as one of SoftBank’s more successful bets. Parent KE Holdings, which paired a nationwide chain of real estate offices with a digital platform matching buyers and sellers, almost doubled on its August U.S. debut and thrust its founder into a high position in the Bloomberg Billionaires Index. SoftBank had the foresight to invest $1.35 billion in 2019 at a $10 billion valuation—the firm is now worth about six times that.
Bom Kim (8.6 billion)
March 11, 2021
The company known as Korea’s Amazon blew investors away during its March debut, surging as much as 97%. Co-founder and Harvard dropout Bom Kim snagged $1 billion from SoftBank in 2015, then a further $2 billion from the Vision Fund three years later, en route to engineering Korea’s largest-ever IPO and joining the ranks of the world’s richest entrepreneurs. Today, its Rocket Delivery one-day service is emulated by e-commerce outfits around Asia.
Ou Yafei (1.2 billion)
Sep 28, 2017
The Chinese online insurer tends to generate less excitement and attention than SoftBank’s showier bets, despite boasting the backing of big names like Jack Ma and Ant/Alibaba, Pony Ma’s Tencent and Ping An Insurance. It rose as much as 18% in a 2017 debut that paved the way for peers like Lufax and—before regulators torpedoed that listing—Ma’s own Ant Group. SoftBank had the distinction of being the sole cornerstone investor in its $1.5 billion IPO, buying as much as $550 million worth of shares.

Note: Figures for billionaires are fortune created after first trading day following IPO. Other figures are as of May 7. IPO data are from September 2017 through April 30, 2021

Source: Company filings, Bloomberg

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