SoftBank Group Corp (TYO: 9984) is aiming to close the first round of investment in its planned $100 billion technology fund by the end of this month. The initial investment is expected to include $45 billion from Saudi Arabia and $25 billion from SoftBank, as well as $1 billion each from Apple Inc., Qualcomm Inc., and Oracle Corp. Further, Abu Dhabi investor Mubadala Development Co. may join the first round and the initial round is likely to exceed $80 billion and the timing of the closing may still change. However, it is not yet clear when the remainder of the planned financing would be raised.
For December quarter, the group has reported a profit of 40 times what it was a year ago. SoftBank’s fiscal third quarter profit has totaled 91.2 billion yen ($814 million) up from 2.3 billion yen in 2015. However, the quarterly sales were relatively flat on-year at 2.3 trillion yen ($20 billion). In the December quarter, SoftBank got benefited from a favorable exchange rate. A weak yen helped to boost the value of overseas earnings when translated into yen.
Additionally, Softbank through the Vision fund formed for the investments in the technology industry over the next decade, and has bought Sprint Corp. for $22 billion and ARM Holdings plc for $32 billion along with stakes in hundreds of startups. The new fund would enable to crack even larger deals as the company aims to capitalize on emerging trends like artificial intelligence and the so-called Internet of Things.
In addition, SoftBank might announce the deals within days of the fund’s first closing. The company has had the preliminary discussions to make an investment in WeWork Cos., a New York-based startup for sharing office space. WeWork, are in more than 140 locations around the world, was most recently valued at $16 billion.
Softbank expects the deregulation under U.S. President Donald Trump to create many business opportunities but did not comment on Trump’s temporary U.S. entry ban on citizens from seven Muslim-majority nations. SoftBank Chief Executive Officer Masayoshi Son met Trump before he assumed the presidency in December and told him SoftBank plans to invest $50 billion in the United States and create 50,000 new jobs. As a first step, Softbank said that they would invest $1 billion in a U.S. satellite communications start-up OneWeb Ltd. OneWeb and Sprint are expected to add about 8,000 jobs, contributing toward that goal.