SoftBank’s Influence on FDI
SoftBank is a Japanese conglomerate with stakes in a wide range of industries around the globe. The company’s influential CEO, Masayoshi Son, founded the Vision Fund investment vehicle for the group.
Each of SoftBank’s two $100 billion-plus Vision Funds are close in size to the entire $131 billion invested by venture capital firms in the U.S. Having invested in more than 80 companies thus far, the Vision Funds are driving investment and growth in new industries that are defining the future of technology – in the consumer and industrial fields.
The mission of the funds is to invest in fast-growing companies with the potential to dominate their industries. With the cash available, the company has been busy… Its investments have ranged from backing a fintech startup in Brazil to taking a stake in British chip designer Arm Holdings.
With its global reach, and broad portfolio of investments, the Vision Funds are at the forefront of technology development. This is causing other venture capital firms to become more aggressive in their investment strategies for fear of losing a potential star to Softbank.
The company’s newest fund is focused on investing in artificial intelligence, automation, and the internet of things. These sectors are changing every industry, from consumer banking to food processing.
As shown in our infographic, automation and AI technologies are having wide-ranging impacts on global trade and FDI trends. This massive fund being poured into these sectors, will give already fast-growing technology developers a shot of adrenaline to grow and modernize manufacturing processes and supply chains even faster.
Will this single fund have a noticeable global impact on FDI trends? Probably not. But it could lead to more intense global competition to find and invest in start-ups, which in turn will lead to not just faster technology development, but also more fast-growing companies and more competition for talent.
Regions like the SF Bay Area and New York City are already experiencing issues on employee and real estate availability and costs. This presents opportunities for lower cost regions to compete for these companies, provided they have the workforce and training programs in place to attract them. A great example of such a region is Waterloo, ON. With a world-renowned research and engineering ecosystem and costs that are competitive when compared to much larger cities, the region has attracted a number of big name companies.
I would recommend any community to model its investment promotion efforts on those of Waterloo. The Softbank Vision Fund-driven world of heavy investment in the industry 4.0 ecosystem will lead to more and more unicorns and gazelles over the next decade: are you ready to attract them to your region?
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ABOUT THE AUTHOR
Paul Brogan is Vice President, Client Services at ROI Research on Investment. Paul joined the ROI team in 2009 and is a recognized thought leader in the field of lead generation and investment attraction for economic development organizations. Having led the strategic development and execution of over 200 global lead generation campaigns, Paul is an expert in target market development, outreach strategies, inbound marketing and lead nurturing. Paul is a highly sought after speaker and writes a regular blog on how FDI is affected by geopolitics, macroeconomics and industry trends. He is an avid runner, listens to too many podcasts, and enjoys dance parties with his daughter.
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