SoftBank and Saudis Launch Largest Tech Investment Vehicle Ever

Softbank CEO Masayoshi Son speaks to the press after meeting with United States President-elect Donald Trump at Trump Tower in Manhattan, New York, the United States, December 6, 2016.

Brendan McDermid | Reuters

An investment group that includes Japan’s SoftBank and Saudi Arabia’s sovereign arm said on Saturday it had closed $ 93 billion in capital, engaged in what is expected to be the largest tech investment fund of all time.

In addition to SoftBank and the Saudi Kingdom’s Public Investment Fund, whose roles were previously announced, Softbank Vision Fund investors include Mubadala Investment
United Arab Emirates company, Apple, Foxconn Technology Group, Qualcomm and Sharp.

In a statement, Softbank CEO Masayoshi Son said the Vision Fund – which hopes to close a total of $ 100 billion in committed capital by November – “will help start and grow businesses by establishing the platforms. – fundamental forms of the next stage of the information revolution “.

Softbank is investing $ 28 billion in the fund, of which more than $ 8 billion will come from an in-kind contribution from its stake in microprocessor company ARM Holdings. The amount of the Saudi fund’s financial commitment has not been disclosed, but the Vision Fund will also be a vehicle for oil-rich Saudi Arabia to diversify its investments.

The Vision Fund intends to acquire both minority and majority stakes in private and public companies, ranging from those focused on emerging technologies to very large established companies “in need of substantial growth funding,” according to a statement. Press.

Son, whose company is the world’s largest technology investor, said, “Technology has the potential to address the greatest challenges and risks facing humanity today. Companies working to solve these problems will need long-term patient capital and visionary strategic investment partners with the resources to sustain their success.

Shortly after his election, President Donald Trump, after meeting Son at Trump Tower in New York in December, said the CEO pledged to invest $ 50 billion in the United States with the aim of creating 50,000 jobs. Although Trump claimed that Son said the planned investment would not have happened without Trump’s election, Dow Jones said the money would come from the Vision Fund.

Yasir Al Rumayyan, Managing Director of the Saudi Public Fund, said: “We are building a diversified portfolio across sectors, asset classes and geographies, and we expect the Vision Fund to serve as a platform for access a range of exciting emerging opportunities in the technology sector. ”

He added that the investment will be a pillar of Saudi Arabia’s efforts to “develop a diverse and knowledge-based economy”.

The deal came after what would have been months of difficult negotiations between tech company SoftBank and the Saudi fund, controlled by Mohammed bin Salman, the deputy crown prince of Saudi Arabia.

The Wall Street Journal detailed in an article on Friday how Softbank had “bargained” with the Saudi fund which had “control over the money, the investment strategy and questions about its engagement.”

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