Saudi Arabia’s Public Investment Fund is Not Investing in SoftBank Vision Fund 2

The fund had previously invested $45 billion in SoftBank’s Vision Fund 1
Saudi Arabia’s Public Investment Fund is Not Investing in SoftBank Vision Fund 2
The Japanese company aims to raise $108 billion for Vision Fund 2. Source: Bloomberg

Saudi Arabia’s Public Investment Fund (PFI), a sovereign wealth fund, one of the biggest backers of SoftBank’s Vision Fund 1, has suspended plans to invest in Vision Fund 2 for now, according to sources close to funding negotiations, via Wired.

Following a meeting with Masayoshi Son, the Chairman of Japanese corporation, SoftBank, in September 2016, Saudi Crown Prince Mohammad bin Salman invested $45 billion in Vision Fund 1, which was worth the $100 billion.

The Vision Fund has since invested tens of billions of dollars in startups and companies. Most notably, SoftBank and Vision Fund have invested over $10 billion in WeWork. The investment in January 2019 valued the company at $47 billion. Only to see it falling below $8 billion during SoftBank’s rescue offer to save WeWork. The fall of WeWork last year has put the fund under a lot of criticism and scrutiny fall last year has put This has led the fund to be under scrutiny raising questions over Vision Fund’s investment strategy, due diligence, and decision making process.

WeWork is proving to be a difficulty for Vision Fund and it’s not the only company they have invested in that is struggling. Zume, Getaround, and Oyo have been showing signs of struggles too. Furthermore, other Vision Fund investments such as Uber and Slack, have also not performed up to expectation since going public. Vision Fund invested $7 billion in Uber in 2017 and is the largest shareholder with a 13% stake, according to financial data provider Refinitiv.

Saudi Arabia was missing from the list of LPs when SoftBank announced the launch of Vision Fund 2. The target is to raise $108 billion for it, $38 billion of which would come from SoftBank itself. 

According to the latest reports by Wired Saudi Arabia will not be putting any money in Vision Fund 2.

The Saudis are quite clear that without Vision 1 succeeding, there will be no more money. MBS told Masa [Son] that until Vision 1 is in good shape, there’s no commitment for Vision Fund 2.

a source told Wired

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