How much smaller will Vision Fund 2 be?

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Vision Fund 2 Expected to Be Significantly Smaller Than Initially Planned

Vision Fund 2 is anticipated to be considerably smaller than the US$108 billion initially announced, primarily due to major investors delaying their commitments and SoftBank's own financial position being under scrutiny. The fund's eventual size remains uncertain as key investors have yet to formally sign on, leaving SoftBank Group's US$38 billion pledge as the sole substantial commitment to date.
Major Investor Commitments Remain Unconfirmed

While SoftBank Group announced in July that it had lined up US$108 billion for Vision Fund 2, this figure is now considered unlikely to be met. A significant portion of this amount was expected from external investors, but these commitments are reportedly not yet firm. The lack of confirmed contributions from major players means the fund's initial scale will likely fall short of earlier projections.
SoftBank's Own Pledge Faces Scrutiny

The US$38 billion pledge from SoftBank Group itself, intended as a cornerstone for Vision Fund 2, is also subject to doubt. Recent investment setbacks, particularly the dramatic valuation implosion of WeWork, coupled with SoftBank's current cash flow situation, raise questions about the group's capacity to fully meet this commitment. As of June 30, SoftBank had US$27.41 billion in cash and cash equivalents, but this was closely matched by its near-term liabilities, suggesting limited available funds for new ventures.
WeWork Debacle Impacts Investor Confidence

The significant writedown expected for the first Vision Fund, largely driven by the WeWork situation, has negatively impacted Masayoshi Son's reputation as an investor. SoftBank and the first Vision Fund invested over US$10 billion in WeWork, with some investments made when the company was valued at US$47 billion. WeWork's subsequent abandonment of its IPO, with a potential valuation of only US$10-12 billion, underscores the risks associated with investing in high-growth, unproven companies.
Broader Market Concerns Dampen Fundraising Prospects

The troubles at WeWork, alongside the poor public market performance of other Vision Fund portfolio companies like Uber (down 34% since listing) and Slack (down 4% since listing), are creating a more cautious investment climate. This environment, coupled with growing concerns about a potential global recession, is diminishing the appetite for IPOs from unprofitable companies. Such market conditions make it more challenging for Son to secure the substantial capital required for a fund of Vision Fund 2's intended scale, which historically relied on a steady stream of successful IPOs from existing Vision Fund companies.

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How much smaller will Vision Fund 2 be?

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