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Venture Capital Markets

SoftBank Considers Vision Fund IPO

If you’re interested in investing in one tech company that is not yet making money, perhaps you’d like to invest in one with stakes in lots of money-losing tech businesses. That seems to be what SoftBank is thinking if this Wall Street Journal report is true: the company is considering taking its $100 billion Vision Fund public later this year. The reasoning—SoftBank chief Masayoshi Son has spent all the money in the first fund but is continuing to negotiate to spend more. The solution is to raise another fund and/or to sell a stake in the Vision Fund to the public.

This may just be a trial balloon to gauge reaction. After all, an IPO would force more scrutiny of the rationale involved in Vision Fund’s giant outlays on all manner of companies—from Uber to WeWork to dog-walking startup Wag. There have already been reports that the fund’s backers have questioned the high prices the fund is paying.

Another issue, as the Journal story points out, is that many of the companies backed by Vision Fund are themselves going public. Investment companies tend to trade at a discount to the underlying value of their pieces. That should put off some would-be shareholders. As we have noted, SoftBank gets the lion’s share of Vision Fund’s gains. As SoftBank is already public, the point of a Vision Fund listing seems questionable, not to mention highly risky.

These are heady times for tech investing, exemplified by Vision Fund. Where will it end?

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