Softbank's Vision Fund could go public in a $300 billion SPAC deal, report says

Reuters/Issei Kato

  • Japanese conglomerate Softbank may take Vision Fund public via a $300 billion SPAC this year, Bloomberg reported.
  • Vision Fund, the world's largest tech-focused venture capital firm, would list in Amsterdam.
  • After a boom in the last 12 months, the SPAC market seems to be cooling off as many companies are underperforming.
  • See more stories on Insider's business page.

Softbank's Vision Fund may go public on the Amsterdam stock exchange later this year in a SPAC deal that could be valued at as much as $300 billion, Bloomberg reported on Monday.

The Japanese conglomerate is considering raising capital for its Vision Fund, the world's largest tech-focused venture capital firm by creating a special purpose acquisition company, or SPAC.

SPACs are shell companies, often also described as blank-check companies, that are set up to purchase private companies. They then take them public without the company having to go through the process of an initial public offering, which can have downsides in terms of time and costs.

Vision Fund has supported tech-industry giants like Uber, DoorDash, Slack, Klarna, eToro and WeWork, as well as smaller tech-focused companies in a wide range of sectors including education, finance, health, logistics and transportation.

The fund was launched in 2017 and has since had a tumultuous journey. Financial bets have not always been as successful as anticipated, for example in the case of WeWork, which collapsed after collaborating with Vision Fund.

In March this year, parent company Softbank was reportedly under investigation by the SEC about some of its stock- and derivative-trading activity.

The collapse of WeWork in 2019 cost Vision Fund at least $4.7 billion, but the fund was able to regain strength throughout the COVID-19 pandemic, thanks to investors' desire to tap into demand from consumers for at-home services from the likes of food-delivery firm DoorDash, whose 2020 IPO helped offset losses from the previous year.

Softbank's fourth quarter 2020 financial results, which were published last week, showed that Vision Fund had reaped a record $36.99 billion in profits after backing Coupang, a South Korean e-commerce company. The fund had already posted record-high profits of $8 billion in the third quarter of the year as it was boosted by its DoorDash and Uber investments.

SPACs have surged in popularity throughout the pandemic, especially in 2021.

So far this year, 321 SPAC IPOs have raised just under $103 billion. In comparison, throughout 2020, 248 SPACs raised $83.4 billion. SPACs account for over 70% of IPOs so far this year and have contributed 62% of the total capital raised by companies going public, according to SPAC Analytics data.

But the market has been cooling off. In mid-April, no SPACs were launched for the first time since March 2020 and the performance of many SPACs has also declined, with the new companies falling below their IPO price.

Softbank did not immediately respond to a request for comment by Insider.

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