Can SoftBank still raise funds for Vision Fund 2?

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SoftBank Faces Significant Challenges in Raising Funds for Vision Fund 2

SoftBank Group founder and CEO Masayoshi Son is encountering substantial difficulties in securing the necessary capital for its planned Vision Fund 2. This struggle is largely attributed to the public failure of WeWork's initial public offering and a general decline in the valuations of several other key investments held by SoftBank. While Son remains determined to proceed, the fund is expected to be considerably smaller than the US$108 billion initially announced in July, with only SoftBank Group itself having made a substantial pledge of US$38 billion.
Investor Commitments Remain Uncertain

Despite the initial announcement of Vision Fund 2 in July, major investors have yet to formally commit significant capital. The only substantial pledge to date is the US$38 billion from SoftBank Group itself. However, the reliability of this pledge is also in question, given SoftBank's recent investment setbacks and potential liquidity constraints. Details regarding the firm commitments from other potential investors, such as Apple Inc, Microsoft Corp, Standard Chartered Plc, Japanese banks, Saudi Arabia's Public Investment Fund (PIF), and the UAE's Mubadala fund, remain unclear, with several of these entities declining to comment.
WeWork's Valuation Collapse Impacts Reputation and Fund Performance

The significant decline in WeWork's valuation and the scrutiny of its business model have notably damaged Masayoshi Son's reputation as a shrewd investor. SoftBank and the first Vision Fund collectively invested over US$10 billion in WeWork, with some investments made at a valuation of US$47 billion. WeWork's subsequent abandonment of its IPO, which would have valued the company at only US$10-12 billion, signifies a substantial writedown for the first Vision Fund. This event, along with the poor public market performance of other portfolio companies like Uber and Slack, has led to skepticism regarding the valuations of numerous unicorn startups.
SoftBank Faces Internal Financial Strains

Beyond the challenges in attracting external capital for Vision Fund 2, SoftBank Group itself is experiencing financial pressures. The company's stock has seen a 13% decline in the past month, reaching its lowest point since January. Furthermore, SoftBank's operating cash flow turned negative in the last quarter, suggesting potential difficulties in raising the tens of billions of dollars required for the new fund. As of June 30, SoftBank held US$27.41 billion in cash and cash equivalents, but this amount was nearly matched by its short-term liabilities, limiting its immediate financial flexibility. The ongoing need to provide annual interest payments to investors in the first Vision Fund, coupled with potential liabilities from ventures like the stalled Sprint-T-Mobile merger, further strains SoftBank's financial resources.

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Can SoftBank still raise funds for Vision Fund 2?

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