What is Softbank? | CNBC Explains

Here in Tokyo sits the headquarters of
Japanese massive conglomerate, Softbank. It started as a software distributor, grew into a
telecom giant, and now spans many industries, pouring billions of dollars into the
likes of Alibaba, Uber and WeWork. Its founder and CEO meets with Donald Trump and
forms business deals with Saudi Arabia’s royal family. And yet, it’s a company
you may know little about. Softbank is ranked number 38 on Forbes’
list of the World’s Biggest Public Companies. That’s a few slots higher than General Motors and IBM.
And far ahead of Amazon, Coca-Cola and Walt Disney. Its business dealings
really know no limits. They include telecommunications,
e-commerce, finance, technology services, semiconductor design, media and marketing,
a baseball team and even a robot. This is Pepper. It’s a humanoid robot
manufactured by SoftBank, designed with the ability to read human
emotions and even analyze voice tone. So who is behind it all? Founder and CEO, Masayoshi Son. He was born in a small town in Japan
and moved to California at the age of 16. He graduated from UC Berkeley
with a BA in Economics in 1980. Son is known for his fierce business
strategies, and they seem to pay off. After meeting with then
President-elect Donald Trump in 2016, it was announced that Son would
invest $20 billion in the U.S. tech sector. After the announcement in the Trump Tower
lobby, Softbank’s stock surged more than 6%, making Son instantly
$2 billion richer. Son is now Japan’s richest man. Yet a big part of Softbank’s
success and size, may actually have less to do with
Japan and more to do with China. In 2000, Softbank made its most successful
investment, putting $20 million into Alibaba. Fourteen years later, that investment turned
into an estimated $60 billion payday when the Chinese e-commerce giant went
public. That’s almost a 300,000% gain in 14 years. With returns like that, it’s no wonder Softbank’s
become an investing powerhouse. Last year, Softbank invested in more than half of the
top 10 biggest investments in VC-backed startups. That included ride-hailing giants, Didi Chuxing, Grab and
Ola, as well as, Flipkart, the Indian e-commerce giant. And those investments are coming
whether companies want them or not. When Didi Chuxing and Uber said
they didn’t need Softbank’s money, Son threatened to invest
in their rivals instead. Needless to say, the
companies took the cash. Then there’s the acquisitions. In 2016, Softbank
purchased European semiconductor firm, Arm Holdings, for $31 billion, the biggest purchase
of a European tech company – ever. Google-owner Alphabet also sold
its robotics firm Boston Dynamics to Softbank in 2017 for
an undisclosed amount. Much of Softbank’s recent investments are
part of what’s known as the Vision Fund – it’s the largest technology
investment fund in history. While the $100 billion fund is
primarily backed by Softbank, it also includes massive investments
from Apple, Qualcomm, Sharp and the sovereign wealth funds
of Saudi Arabia and the UAE. The fund has invested billions of dollars into about 30
companies, including Uber, ARM, Nvidia and WeWork. It recently announced a $200 billion power
generation project in Saudi Arabia, which would be the
world’s biggest solar project. And it isn’t stopping there. The fund wants to become
the largest shareholder in 100 tech companies around the world
once it’s done investing its money, creating the biggest ecosystem
of tech companies in the world.

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