Softbank and Saudi Arabia’s PIF planning $100BN tech fund

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Softbank has announced it is creating a new global tech investment fund, seeded with $25 billion of its own money. The fund, which will be London, UK based —  with a working title of the ‘Softbank Vision Fund’ — is also set to be bolstered with up to $45BN from the public investment fund of Saudi Arabia.

The Saudi PIF recently ploughed $3.5BN into Uber, of course, as part of an economic strategy to reduce its reliance on oil over the next 15 years (although, in the near term at least, Uber’s ride-hailing platform doesn’t look like the most obvious vehicle for that). Getting involved with a general global tech fund would spread the kingdom’s bets further.

Softbank says it has a non-binding memorandum of understanding with the Saudi PIF at this point, under which the latter will “consider investing and becoming the lead investment partner”.

It adds that “a few large global investors” are also in active dialogue to also participate in the fund, although it’s still capping the overall potential size of the fund at up to $100BN.

The investment period for the fund is pegged at five years, meaning it will potentially be investing $20BN into tech startups globally each year. A figure that would make Greylock’s newly closed $1BN fund seem modest.

Given the size and global scope of the fund, Softbank is jockeying to become a substantial force in tech investment in the near term. Indeed, CEO Masayoshi Son said it’s aim is to become “the biggest investor in the technology sector” over the next decade. (And given he’s been known to talk in terms of 300-year business plans, a decade really is quick thinking for Son.)

The Japanese telecoms giant has been diversifying its own investments in recent times, completing a £24BN acquisition of UK semiconductor firm ARM Holdings last month to bet big on growth in the Internet of Things.

Early Softbank investments include web services, such as ecommerce giant Alibaba and Yahoo Japan, and more recently U.S. telco Sprint.

More recently still it invested in mobile gaming, although it has been rumored to be rethinking its activities there — with reports suggesting it is looking to offload its stake in Supercell to Chinese tech giant Tencent. This summer Softbank also sold almost all its shares in games firm GungHo for $685M.

Softbank says its objective with the new tech fund is to accelerate its global growth strategy.

“The Fund will make investments drawing upon [Softbank Group]’s investment proficiency, operational expertise and breadth of experience in the technology sector,” it notes.

According to the FT, the fund will be led by Rajeev Misra, SoftBank’s head of strategic finance.

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