080CEO Eugene Izhikevich
is developing brains for
robots. His first product
allows cleaning machines
to navigate an indoor
environment by avoiding
obstacles. Brain has now
signed a deal with Walmar t.
“Take cleaning machines:
they could be robots if you
could put a brain inside
them,” he says. “Instead,
we use people to push, to
pull, which is not the best
use of human intelligence.”Founded in 2010 in San
Francisco, Mapbox’s online
map customisation is
now used by websites and
apps including Facebook,
Snapchat, The Weather
Channel and National
Geographic. Mapbox
takes data from open
sources such as Nasa,
and proprietary ones such
as DigitalGlobe, as well
as from its own users to
refine its maps. SoftBank
invested $164m in 2017.He lent money to SoftBank and then helped it to structure
the complex takeover of Vodafone Japan. They re-connected
eight years later at a wedding in the summer of 2014. Alibaba
- the company in which Son had invested $20m in 2010 – had
recently pulled off the largest IPO in history. The windfall
allowed SoftBank to expand globally, and Son wanted Misra
to work for him again. “I didn’t know exactly what I was going
to do, but it sounded exciting,” Misra recalls.
To buy the British company, SoftBank was forced to sell
shares in Alibaba and Supercell; the whole deal pushed the
Japanese company’s debt to $105 billion. “We wanted to
make investments in the AI revolution that was coming,
and in all these companies going to disrupt every industry
on the planet,” Misra says. “Financial services, cars, hotels,
office space, residential brokerage, you name it. We felt we
were restricted because we spend a lot of money. We said,
let’s raise money. Let’s become the biggest investment
fund on the planet.” Masa called it the Vision Fund.
The investment hypothesis underpinning the Vision Fund
centres around scale: a winner-takes-all strategy. They
targeted companies with 50 to 80 per cent market share,
and over-invested to enable these companies to grow fast
and globally. “That’s something I learned from Masa,” Misra
says. “Is it more important to grow fast or to be efficient?
Efficient means getting your costs right and your profits
right. It’s not about counting the number of dollars that you
spend on stationery that’s important, and building step by
step in the US or in India. Our view is that companies need
to scale first. Once you scale, you’ll get everything else right.
The global barriers are coming down, so if you don’t become
global fast, someone else will do it.”
And for that, of course, they were going to need capital –
and lots of it. Initially, the fund was going to start with $30
billion –a huge sum, but not unheard of among global funds.
That was until Masa decided that $100 billion would be better.
Misra and Son put together a presentation that showcased
the fund’s investment track record – it’s portfolio at the time
already included Arm, Sprint, SoftBank Mobile, Alibaba and
Yahoo! Japan – and honed their sales pitch. In 2016, between
September and December, they travelled the world, meeting
companies in the US, pension funds, sovereign wealth funds
in Asia and the Middle East. Though politely received, their
proposal was mostly met with disbelief, with $100 billion for
a single investment fund being viewed as a totally unrealistic
sum to attempt to raise, regardless of ambition.
However, in spite of the broadly sceptical reception, a few
were intrigued by SoftBank’s proposition. One such person
was Mohammed bin Salman, the Crown Prince of Saudi Arabia.
A 500-strong Saudi delegation visited Tokyo in May 2017.
Before meeting Bin Salman, Son and Misra first pitched the
idea of the Vision Fund to the prince’s closest advisers, intro-
duced by two former colleagues of Misra’s at Deutsche Bank.
A few days later, they received the Crown Prince at the palatial
Geihinkan state guesthouse in central Tokyo. According to
an interview Son gave to financier David Rubenstein later
that year, Son told Bin Salman: “I want to give you a Masa
gift, the Tokyo gift, a $1 trillion gift.” Bin Salman responded:
“OK, now it’s interesting.” Son replied: “Here’s how I can
give you a $1 trillion gift: you invest $100 billion in my fund,
I give you a trillion.” Son left the meeting with a non-binding
commitment of $45 billion over the next five years.
Six weeks later, the two men met again in Riyadh, the Saudi
capital. Son visited Aramco, the state oil company, and spent
time with the executives of the Saudi sovereign wealth fund.
By then Apple, Qualcomm, Foxconn, Sharp and Abu Dhabi’s
Mubadala had also committed a further $20 billion, and
SoftBank added $28 billion from its own balance sheet. A
signing ceremony in Riyadh was held in May 2017 to coincide
with Donald Trump’s first overseas trip as US president – and
the $100 billion Vision Fund was officially launched.
SoftBank, which had never managed third-party money at
this scale and had never launched a regulated fund, now owned
the biggest investment fund in history, equal to all the money
raised by US VCs in the previous 30 months. The fund’s CEO,
Rajeev Misra, was under pressure. “We now had fiduciary
responsibility to all these companies, to our partners, to the
people of Saudi Arabia. And did we get the first call for someone
looking for capital two years ago?” Misra recalls. “No.”One afternoon in December 2018, Misra welcomed WIRED
to the headquarters of the Vision Fund, in a four-storey
Edwardian building in London’s Mayfair. He was barefoot
and had rolled up his shirt sleeves, revealing a Shamballa
bracelet on one wrist. During the conversation, his mood
shifted between enthusiastic and pensive, at which point he
would pause and puff on an electronic cigarette.
Currently, Misra’s Vision Fund has a portfolio of more than
60 companies. This includes an estimated $7 billion stake in
US graphics processor manufacturer Nvidia; a $502 million
stake in British startup Improbable, which develops large-
scale virtual reality worlds for gaming and training; and a
$250m stake in the productivity platform Slack. A consortium
led by SoftBank has also invested around $8 billion in Uber.
Misra heads a team of managing partners – seven of them
based at the fund’s Silicon Valley outpost, two in Japan, and
two in London – who scrutinise dozens of companies weekly in
search of potential opportunities for investment. They come
together on a regular basis to collectively review the spread
of deals presented by individual partners.
These ideas are then peer-reviewed, with due diligence
being undertaken by an independent team in a rigorous vetting