INSUBCONTINENT EXCLUSIVE:
This week WeWork announced that its Chinese subsidiary —WeWork Chinamdash;raised an additional $500 million in capital in a deal led by
SoftBank, Temasek Holdingsand others
The deal reportedly values the Chinese branch of the shared workspace and real estate management company at $5 billion, up from $1 billion
(post-money) in the round WeWork China announced almost a year ago in July 2017.
SoftBank rarely doubles down on a particular company
At time of writing, SoftBank itself has made 175 investments in 144 different companies, according to Crunchbase data
Of those, just 23 companies raised more than one round from SoftBank
And in conjunction with its China branch, with four cumulative transactions on record, WeWork is tied for first place in a ranking of
companies most-engaged with SoftBank investment arm.
That being said, SoftBank investment strategy appears to be one of taking stakes in
leading companies from a given sector
And although it sometimes difficult to tell just how large some of those stakes are as a percent of equity in the company, SoftBank finds
itself involved in many companies& biggest rounds to date.
Take WeWork for example
If you take all of the equity funding rounds raised by its main corporate entity and regional offshoots like WeWork China and WeWork India,
you&ll find that SoftBank was either the sole investor, the round leader or a syndicate participant in the rounds that delivered the lion
share of capital to the company.
If the market opportunity is big, SoftBank will typically make investments in regionally dominant
companies operating in that sector
After all, if worldwide dominance is difficult to obtain for any one company, SoftBank is so big that it can take positions in the regional
leaders, creating an index of companies that collectively hold a majority of market share in an emerging industry.
It a bold strategy that
involves taking some big risks and writing big checks
As a result, SoftBank is typically the largest single investor — in terms of dollars committed — in the fastest-growing companies in an
industry.
Real estate is just one theme
WeWork is just one facet of SoftBank real estate investment efforts
The table below shows a selection of SoftBank investments in the real estate and construction sector
It ranked by the amount of money invested in rounds involving SoftBank (either as the sole investor or as part of a broader syndicate)
We also show what percent of total known equity funding SoftBank-involved rounds account for.
SoftBank strategy of writing big checks to
successful startups in large and growing market segments extends past real estate, of course
It touches many other industries, including e-commerce and logistics, insurance and healthcare, and, perhaps most contentiously,
ride-hailing and on-demand transportation
SoftBank also has a strong portfolio of artificial intelligence companies to flex at some point down the road
It has invested in the likes of Nvidia, Improbable, Brain Corporation, Pentuumand others
Furthermore, its stakes in Mapbox and Cruise Automation are advantageous to SB Drive, its own autonomous vehicles effort
SoftBank is one of the cases of everything old being new again
In the late 1990s, SoftBank and its founder Masayoshi Son were some of the biggest investors in tech
Then, like today, Son aimed to forge a kind of virtual Silicon Valley in SoftBank portfolio, a platform for symbiotic, cooperative
relationships and business partnerships to emerge
There definitely the possibility for this sort of bonhomie to emerge today, given the thematic nature of the firm investment strategy
But at the same time, Son is famous for losing a lot of money when the first tech bubble collapsed
It remains to be seen whether the firm will make it out on top the second time around.
