SoftBank fund to hire China team, open Shanghai office: report

December 05, 2018 13:02
Steered by Masayoshi Son, SoftBank’s mega tech fund has invested billions in promising startups around the globe, shaping a new landscape in the venture capital industry. Photo: Bloomberg

SoftBank Group's Vision Fund is hiring an investment team to be based in China, with plans to open its first China office in Shanghai next year, according to Reuters.

Citing sources with knowledge of the matter, the news agency reported that the Shanghai office will be followed up later with two more locations -- Beijing and Hong Kong.

The mammoth tech-focused Japanese fund plans to hire about 20 people for the China operations, the report said.

Established in 2016 by Masayoshi Son, founder of the Japanese telecommunications and internet firm SoftBank Group Corp, Vision Fund aims to invest in flashy startups around the globe.

Targeted to raise US$100 billion in six months, the mega investment fund giant raised over US$93 billion as of last May, according to Reuters, receiving backing from the sovereign wealth funds of Saudi Arabia and Abu Dhabi, Apple and Hon Hai Precision Industry (Foxconn).

As the world’s largest technology investor, in 2017, the fund invested over US$29 billion in tech companies around the world in diverse sectors ranging from robotics, ride-hailing, to e-commerce and semiconductors. It was involved in more than half of the top 10 biggest investments in venture capital-backed startups last year.

In China, it has invested over US$13 billion in Chinese firms since 2013, according to Refinitiv data. The investments include ride-hailing giant Didi Chuxing and ZhongAn Online P&C Insurance (06060.HK).

Last December, Vision Fund was reportedly looking to invest in health and financial businesses owned by Chinese Insurer Ping An (02318.HK), including the online-financing company Lufax. It has poured billions into Ping An’s healthcare portal Ping An Good Doctor (01833.HK) which went public in May.

The fund also invested in the Chinese unit of the New York-based shared workspace giant WeWork in July, to fuel its expansion in China.

Chinese truck-hailing startup Man Bang Group, facial recognition and artificial intelligence startup SenseTime, and most recently Beijing-based Bytedance, the company behind news aggregator Toutiao and fast-growing video sharing platform Tiktok, find place in Vision Fund’s extensive investment portfolio.

According to CB Insights, SoftBank, via its Chinese unit, has invested in China-based Android app store Wandoujia, clothes sharing platform YCloset, management service provider V-Joy Tech, and online used car auction marketplace Tian Tian Pai Che, among many others.

SoftBank founder Masayoshi Son was also an early backer of Chinese e-commerce and tech giant Alibaba Group in 2000.

In one of the world’s most vibrant tech markets, SoftBank Vision Fund is facing a crowded field of competing funds trying to replicate its model.

US-based venture capital firm Sequoia Capital announced in June that it is establishing its own US$8 billion global fund to compete with the SoftBank Vision Fund. The firm’s Chinese arm, Sequoia Capital China, will raise more than US$2 billion for the fund that will focus on investments in Chinese companies.

In July, Chinese banking-to-shipping conglomerate China Merchants Group announced the launch of a 100 billion yuan venture-capital fund, the China New Era Technology Fund, which will be mainly deployed in the country.

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