SoftBank Group Corp.: history, ownership, mission, how it works & makes money

A Brief History of SoftBank Group Corp.

Founded in 1981 by Masayoshi Son, SoftBank Group Corp. began its journey as a software distributor and evolved into a leading technology investment firm. Over the decades, the company diversified its portfolio, focusing on telecommunications, internet services, and financial technology, all while leveraging venture capital to create a plethora of opportunities in emerging tech sectors.

In 1994, SoftBank launched the SoftBank Internet and Media, Inc. (SIMI) to manage its growing investments in internet companies. This marked the beginning of its significant expansion into the tech industry. By 1999, the company went public on the Tokyo Stock Exchange, raising approximately ¥1.1 trillion (approximately $10 billion) through its IPO. This influx of capital enabled SoftBank to acquire stakes in various tech companies.

SoftBank’s acquisition strategy kicked into high gear with the purchase of Vodafone Japan in 2006 for around ¥1.75 trillion (approximately $15 billion), which allowed it to expand its telecommunications business significantly. This acquisition helped SoftBank become the third-largest mobile provider in Japan.

In 2017, SoftBank made headlines with the launch of its $100 billion Vision Fund, aimed at investing in AI and technology companies globally. The Vision Fund has invested in various prominent startups including Uber, Grab, and WeWork, with some investments reaching beyond $10 billion in individual companies.

As of March 2023, SoftBank reported total assets of approximately ¥19 trillion (around $150 billion) with a market capitalization hovering around ¥9 trillion (approximately $70 billion). The company has faced challenges, including substantial losses from its tech investments. In the fiscal year ending March 2022, SoftBank incurred a net loss of approximately ¥1.7 trillion (around $13 billion) due to declining valuations in its portfolio.

In 2023, SoftBank reported a revenue of approximately ¥6.7 trillion ($52 billion) and a net profit of ¥1.09 trillion (around $8.3 billion), indicating some recovery after previous losses. This recovery was attributed to improved portfolio performance and strategic divestments, including a sale of Arm Holdings to NVIDIA, although this deal later fell through due to regulatory hurdles.

Despite facing a volatile market landscape, SoftBank continues to play a critical role in shaping the future of technology through significant investments and strategic partnerships. The company’s focus on futuristic technologies positions it as a key player in the global technology ecosystem.

A Who Owns SoftBank Group Corp.

SoftBank Group Corp. is a multinational conglomerate holding company based in Tokyo, Japan. The company is engaged in various sectors, including telecommunications, e-commerce, and technology investments. The ownership structure of SoftBank Group is diverse, involving institutional investors, mutual funds, and private individuals.

As of October 2023, the largest stakeholders in SoftBank Group include:

The substantial ownership percentage held by Masayoshi Son, at 19.0%, reflects his significant influence over the company’s direction and strategic decisions. Additionally, the Vision Fund 1, which is a pivotal investment vehicle for SoftBank, holds 29.7% of the company's shares.

SoftBank Group Corp. has faced considerable market fluctuations and scrutiny. In the fiscal year ending March 2023, the company reported a total consolidated revenue of approximately ¥6.64 trillion (around $61 billion), an increase from the previous year due to a rise in its technology portfolio.

SoftBank’s stock performance has been volatile, with a year-to-date performance of approximately -19% as of October 2023. The stock is traded on the Tokyo Stock Exchange under the ticker symbol 9984.

The company has also made strategic divestments; for instance, in 2021, SoftBank sold approximately $21 billion worth of shares in Alibaba Group, reducing its stake from 29% to 14%.

In summary, SoftBank Group's ownership consists of a blend of institutional investors, private individuals, and mutual funds, highlighting the diversified nature of its shareholder base as it navigates through the complexities of the global technology landscape.

SoftBank Group Corp. Mission Statement

SoftBank Group Corp. was founded in 1981 and has evolved into a global technology investor and conglomerate. The company’s mission is to drive the information revolution and contribute to the advancement of society through technology.

SoftBank operates with a vision of building a connected world through investments in high-growth sectors including telecommunications, internet services, and artificial intelligence. Their strategic focus on sustainability and innovation aligns with their goal of generating a positive societal impact.

Key Financial Metrics

As of the latest financial reports, SoftBank Group Corp. has shown substantial figures that reflect its scale and ambition.

SoftBank has structured its business around several core segments, including telecommunications, Internet of Things (IoT), and artificial intelligence. Their leading subsidiary, SoftBank Corp., plays a critical role in this ecosystem, generating significant revenues from mobile communications services.

Investment Strategy

SoftBank is known for its aggressive investment strategy, particularly through its Vision Fund, which has amassed over $100 billion in capital. The fund primarily targets early-stage and growth-stage technology companies worldwide, leveraging its vast resources to foster innovation.

The Vision Fund has made notable investments in companies such as:

• Uber Technologies: Invested approximately $9.3 billion
• WeWork: Invested approximately $10 billion
• Call of Duty: Mobile (Activision Blizzard): Over $500 million in total investments

Sustainability Commitment

SoftBank has committed to sustainability, investing in renewable energy and technology that supports the UN Sustainable Development Goals (SDGs). Its initiatives include investments in Clean Energy and Smart City projects that are projected to generate significant economic and social benefits across communities.

Through these efforts, SoftBank aims to not only enhance its financial returns but also to create a sustainable future that benefits society as a whole.

How SoftBank Group Corp. Works

SoftBank Group Corp., a multinational conglomerate based in Tokyo, specializes in investment, telecommunications, and technology. As of the fiscal year ending March 2023, SoftBank reported a revenue of approximately ¥6.06 trillion (around $55 billion), a decline of 0.9% year-over-year due to market volatility and strategic shifts.

The company operates through several segments, primarily focusing on its Vision Fund, which invests heavily in technology startups. As of September 2023, the Vision Fund had assets under management totaling around $100 billion, with notable investments in companies such as Uber, DoorDash, and WeWork. The Vision Fund reported a significant loss of ¥3.1 trillion in the fiscal year 2023, reflecting the downturn in tech stocks.

SoftBank also holds a majority stake in Sprint Corporation, which merged with T-Mobile US in 2020, forming T-Mobile’s current operations. The merger resulted in SoftBank retaining approximately 24% of T-Mobile’s shares. For the second quarter of 2023, T-Mobile reported a revenue of $19.1 billion, showing an increase of 5.3% compared to the previous year.

In addition to telecommunications, SoftBank is investing in emerging technologies such as artificial intelligence, robotics, and the Internet of Things (IoT). The company’s subsidiary, Boston Dynamics, has developed advanced robotics with revenues of approximately $200 million in 2022, focusing on robotic solutions for industrial and commercial applications.

SoftBank's strategic approach combines aggressive investment with operational control. The company leverages its vast portfolio to create synergies between its investments, allowing for shared resources and technological advancements. This interconnected strategy aims to maximize growth and innovation across sectors.

The company also actively participates in mergers and acquisitions to enhance its market positioning. A notable acquisition includes the purchase of ARM Holdings for approximately $32 billion in 2016, which has become a pivotal player in the semiconductor industry, contributing to SoftBank’s overall technological ecosystem.

As of September 2023, SoftBank's market cap stands at around $73 billion, reflecting fluctuations in the tech market and global economic conditions. The company has focused on reducing debt, targeting a debt-to-equity ratio of 0.5 by 2024, a significant improvement from the 1.1 ratio reported in early 2023.

In summary, SoftBank Group Corp. operates through a diversified portfolio, focusing on tech investments while navigating complex market dynamics. The company's strategy is an integration of investment and technology, aiming to remain a leader in the innovation landscape.

How SoftBank Group Corp. Makes Money

SoftBank Group Corp. operates primarily through its investments in technology and telecommunications, with a diversified portfolio that includes startups and established companies. These investments generate significant revenue streams for the company.

One of the key ways SoftBank makes money is through its Vision Fund. Launched in 2017, the Vision Fund, in partnership with Saudi Arabia's Public Investment Fund, has amassed over $100 billion in capital. As of 2023, the fund has invested in over 80 companies globally, including notable firms like Uber, WeWork, and DoorDash.

SoftBank's stake in Alibaba, which has been a cornerstone of its investment strategy, significantly contributes to its revenue. As of September 2023, SoftBank owns approximately 23% of Alibaba, valued at around $64 billion. This investment has generated substantial returns, with Alibaba’s stock experiencing fluctuations but still representing a major asset on SoftBank's balance sheet.

In addition to direct equity investments, SoftBank earns money through its telecommunications arm, SoftBank Corp. This subsidiary reported consolidated revenues of approximately ¥4.5 trillion (about $41 billion) for the fiscal year ending March 2023, largely driven by mobile services and broadband communications.

The table below summarizes SoftBank's major revenue sources and their financial impact for the fiscal year ending March 2023:

The performance of the Vision Fund in particular has seen mixed results due to market volatility. As of March 2023, it reported a net loss of approximately $8.7 billion for the fiscal year, significantly influencing overall profitability. Despite these losses, the fund continues to seek out growth-stage companies in sectors such as AI, robotics, and fintech.

SoftBank has also explored strategic divestitures to bolster its capital position. In December 2022, the company sold shares in Alibaba, raising approximately $9.8 billion to stabilize its balance sheet amidst challenging market conditions. This strategy highlights SoftBank's adaptive approach in managing its investments and sustaining cash flows.

The emergence of new revenue streams, such as its investments in renewable energy and artificial intelligence startups, is set to diversify SoftBank’s portfolio further. The company plans to allocate up to $30 billion towards these sectors by 2025, signaling a transition toward more sustainable and future-oriented investments.

Overall, SoftBank's revenue generation is characterized by a blend of high-stakes investments, stable telecom operations, and an evolving strategy that seeks to leverage emerging market opportunities.