Softbank Plans $2 Bln in Internet Investment Funds, Nikkei Says
Bloomberg News
June 23, 1999, 4:19 p.m. PT
Softbank Plans $2 Bln in Internet Investment Funds, Nikkei Says
Tokyo, June 24 (Bloomberg) -- Softbank Corp., one of the
world's biggest investors in online companies, plans to set up
three new venture capital funds worth almost $2 billion in a bid
to strengthen its domination of the Internet economy, the Nihon
Keizai newspaper reported, citing unnamed company sources.
No company officials were available for comment.
Tokyo-based Softbank, which already has direct and indirect
stakes in more than 100 companies doing business online, will
establish next month two venture funds in the U.S. and one in
Japan with the objective of doubling the number of such
investments over the next two to three years, the Nikkei said.
The planned Internet funds are worth the equivalent of a
fifth of total U.S. venture capital investments last year, and
represent the largest amount of ''seed money'' ever to cultivate
the growth of a single industry, according to the report.
Softbank has one of the best track records of any Internet
investor, having accumulated more than $10 billion in unrealized
gains on a series of early bets on fast-growing online ventures
including Yahoo! Inc. Billionaire founder Masayoshi Son said last
month he wants Softbank to dominate the global Internet economy
in the manner that industrial conglomerates such as Mitsui and
Mitsubishi held sway over Japan's prewar economy.
That prospect pushed Softbank's stock to a record high of
22,210 yen on Tuesday. Shares have tripled in the last year, and
closed yesterday at 21,970.
About a third of the funds will be provided by Softbank,
with the rest raised from private investors, the newspaper said.
Softbank Technology Ventures, Softbank's San Jose-based
venture capital affiliate, will form a $600 million fund that
will initially target as many as 70 Internet start-ups over the
next two to three years, Nikkei said.
Softbank's U.S. holding company, Newton, Massachusetts-based
Softbank Holdings Inc., will create a $1.2 billion fund with a
narrower focus on up-and-running online businesses that are
preparing to hold an initial public share offering in three to
six months, according to the report.
Little, Then Lot
Softbank typically makes an initial investment of between $5
million and $10 million in a nascent Internet venture, then
follows up with a larger investment of $100 million or more when
the company matures enough to go public.
Softbank Technology Venture Managing Director Gary Reischel
describes his fund as the ''scout ship'' for Softbank.
Reischel and Softbank Holdings Vice Chairman Ronald Fisher
yesterday returned to the U.S. from Japan after talks with
Softbank's Son. Neither was available for comment.
The third fund, worth about 10 billion yen, will be
established in Japan by domestic affiliate Softbank Finance to
identify and support promising Japanese Internet enterprises, the
Nikkei said.
Some of those companies may be listed on a Japanese version
of the U.S. Nasdaq Stock Market that Softbank is seeking to
launch as early as next year.
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