SoftBank Vision Fund CEO explains where he’s putting dollars to work

SoftBank Vision Fund CEO explains where he’s putting dollars to work

Rajeev Misra, CEO of the SoftBank Investment Advisers.

SoftBank

Rajeev Misra, the chief executive of the colossal SoftBank Vision Fund, has revealed the three main areas he’s looking to make investments during the coronavirus pandemic. 

Armed with billions of dollars, Misra told the virtual Founders Forum tech conference on Thursday that the Vision Fund is on the hunt for start-ups focusing on food delivery, digital healthcare, and virtual learning.

The former Deutsche Bank executive said these fast-changing segments are where the Vision Fund has been “putting dollars to work” during the last few months.

“The rate of technological change that was already there has just gone more rapid,” said Misra. “We’re trying to assess new changes in human behavior.”

Food delivery

On food delivery, Misra said he’s not just interested in backing start-ups that deliver takeaways from restaurants to people’s homes. He believes that “the way we eat” is fundamentally changing and he said the Vision Fund is interested in the “whole stack” when it comes to food delivery.

“The whole food ecosystem, not just delivering food but, delivering groceries, cooking the food in (dark) kitchens, is going to change,” he said.

Dark kitchens prepare food away from restaurant premises specifically for takeaways. “It’s about converting parking lots into kitchens,” Misra said.

The Vision Fund is the largest shareholder in food delivery firms DoorDash and UberEats. It’s also “heavily invested” in a Chinese food delivery company called Ele.me, which is owned by Alibaba. 

Virtual learning

Another big change that the SoftBank Vision Fund has observed relates to online education.

“There we have some investments like Zuoyebang,” said Misra, referring to the online tutoring company that SoftBank reportedly pumped $750 million into at the end of June.

“Education is extremely important for society,” said Misra, adding that it can help to tackle wealth disparity.

Healthcare

Life science companies and digital healthcare companies are also of interest to the Vision Fund, Misra said.

Drug discovery, which typically takes a long time and involves billions of dollars, is being sped up by innovative start-ups, he said, before adding that online consultations and artificial intelligence-powered personal doctor apps have been surging under lockdowns.

“One in 10 Americans participate in a virtual visit,” said Misra. “That’s going to go up.”

Misra pointed out that a lot of “general ailments” don’t need to be seen by a doctor. “Of course there is a placebo and a psychological impact of seeing a doctor, but the digital impact on healthcare as an industry, which is perhaps the biggest part of the GDP in the U.S. will get cheaper with faster drug discovery, vaccines, etcetera.”

The SoftBank Vision Fund, a tech investment vehicle owned by the SoftBank Group, was announced by SoftBank CEO Masayoshi Son in 2017. At $100 billion, it was several orders of magnitude larger than any other tech investment fund including those of Silicon Valley heavyweights like Sequoia and Andreessen Horowitz.

In July 2019, SoftBank shocked tech investors again when it announced plans to create a $108 billion “Vision Fund II” to invest in AI. The future of Vision Fund II hangs in the balance after the first Vision Fund posted a record loss of $18 billion in May.

In total, the SoftBank Vision Fund has backed around 90 companies using both Fund I and Fund II. 

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