TOKYO – SoftBank Group Corp. said on Wednesday that its Vision Fund had spent $45.2 billion of its $97 billion pool of capital as of the end of December last year, in little more than a year-and-a half since its creation.
Backed by the sovereign wealth funds of Saudi Arabia and Abu Dhabi, the Vision Fund has gobbled up stakes in the world’s most valuable startups, investing billions into ride-hailing pioneer Uber Technologies Inc. and shared office-space firm WeWork Cos. Inc.
Attention is now on whether the world’s largest technology fund can maintain its frenetic investment pace, which has upended the norms of both venture financing and private equity.
Tapping Saudi Arabia to fuel its investment machine further comes with reputational risk, following the killing of Saudi journalist Jamal Khashoggi.
The fund also faces criticism from those who say it inflates valuations and helps companies stay private longer.
The Vision Fund and an affiliate together logged an operating profit of Y808.8 billion ($7.36 billion) in the nine months ended in December, more than triple what the fund earned a year ago, thanks largely to the sale of its stake in Indian e-commerce company Flipkart to Walmart Inc. That, along with gains from listing its Japanese mobile-phone unit, helped parent SoftBank earn a nine-month net profit of Y1.538 trillion, up 52% from a year ago.
Total debt at SoftBank, whose bonds carry a junk-level rating from credit-rating firms, stood at Y17 trillion as of Dec. 31, compared with Y5.3 trillion in cash and cash equivalents.
Most of SoftBank’s debt is tied to SoftBank’s U.S. mobile-phone carrier Sprint Corp. If U.S. regulators greenlight the proposed merger between Sprint and T-Mobile U.S. Inc., that would lower its debt, giving it more room to borrow.