The world's largest tech fund

Masayoshi Son turned SoftBank into the largest tech investment firm in the world, managing over $180 billion in assets. Known for backing tech giants like Alibaba, Uber, and DoorDash, Son’s career has been driven by bold decisions and massive risks that have made billions while also leading to some of the biggest losses in tech history.

This week, we explore how Son built SoftBank, the historic bets that defined his career, and the lessons from his most challenging failures:

• 💼 The start of a tech giant

• 📈 Creating the $180B Vision Fund

• 💥 The $11.5 billion mistake

— Investor Briefcase Team

Masayoshi Son began his entrepreneurial career while studying at UC Berkeley, where he invented and sold an electronic translator to a Japanese tech firm for $1 million at just 19 years old. After graduating, Son decided to return to Japan in 1981, seeing untapped potential in the country’s growing tech sector.

With $100,000 in savings, he founded SoftBank as a software distributor for Japan’s small but growing PC market. Son quickly recognized the potential for rapid expansion in technology and used SoftBank’s early profits to diversify. By the late 1980s, SoftBank had entered publishing and telecommunications, making it one of Japan’s most prominent tech firms.

In 1994, SoftBank went public on the Tokyo Stock Exchange, raising $500 million. The influx of capital allowed Son to transition SoftBank from a tech conglomerate to a tech investor. His first major investment came in 1995, when he paid $100 million for a 35% stake in Yahoo!. Many questioned the move, but Son’s foresight proved correct as Yahoo! Japan became a dominant platform in the country.

It wasn’t long after this until he crossed paths with Jack Ma and decided to invest $20 million for a 35% stake in a little-known Chinese e-commerce startup called Alibaba.

Alibaba grew into one of the largest e-commerce platforms in the world, and SoftBank’s stake soared to over $70 billion at its peak. The profits from Alibaba not only solidified SoftBank’s global standing but also gave Son the confidence to pursue his most ambitious project, which was the Vision Fund.

Launched in 2017, the Vision Fund became the largest tech-focused investment vehicle in history, raising over $180 billion. Son convinced Saudi Arabia’s Public Investment Fund to contribute $45 billion and secured $15 billion from Abu Dhabi’s Mubadala Investment Company. He pitched a future driven by artificial intelligence, robotics, and advanced technologies, arguing that SoftBank could lead the next wave of innovation.

Since its start, The Vision Fund has invested heavily in companies like Uber, WeWork, ByteDance, and DoorDash. These investments gave SoftBank outsized influence, helping startups achieve market dominance while being backed by over billions of capital from a single investor.

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While Alibaba became a notable investment for its success outsized success, not all of Son’s investments have been as forgiving. The most notable misstep was WeWork. SoftBank invested over $10 billion in the co-working company, but financial mismanagement and governance issues caused its valuation to collapse from $47 billion to near bankruptcy. The fallout resulted in an $11.5 billion loss for SoftBank and raised questions about Son’s investment approach.

The Vision Fund has also faced larger challenges, including volatile markets and criticisms of inflating startup valuations. Year-over-year, the Vision Fund’s performance has been mixed, with early years delivering double-digit returns, only to see sharp declines during tech market corrections.

Despite the failure Son, who is now 66 years old, has remained bullish on the future of technology. He has shifted SoftBank’s focus to artificial intelligence, calling it the most transformative technology of the next decade. However, it remains to be seen whether managing such a large fund with a single investor will achieve the same success as SoftBank’s early days or result in backing one too many failed ventures like WeWork.

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Other Visionary Investors

> Vinod Khosla: Co-founder of Sun Microsystems and founder of Khosla Ventures. He is known for his investments in clean technology and healthcare startups.

> Yuri Milner: Founder of DST Global, with significant investments in companies like Facebook, Twitter, and Alibaba.

> Neil Shen: Founding partner of Sequoia Capital China, instrumental in the growth of companies like Alibaba, JD.com, and ByteDance.

> Sheryl Sandberg: COO of Facebook and founder of LeanIn.Org, investing in startups focused on empowering women and promoting diversity in tech.

> Jim Breyer: Founder of Breyer Capital, an early investor in Facebook, and known for his investments in technology and media companies.

Each week we profile the most notorious investment stories.

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