ANNUAL REPORT 2021 SoftBank Vision Funds: Investment Strategy

Fiscal 2020 was a transformational year for SoftBank Vision Funds and the world.

The pandemic affected each of us in ways none of us could have predicted.
We have had to be even more agile as individuals and as an organization and pull together to navigate uncharted territory. I truly believe that we have emerged stronger, and I am humbled by the resilience our team has shown in the face of such once-in-a-lifetime adversity. We have worked tirelessly for our firm, our LPs, and our portfolio companies.

SoftBank Group has completed its transition to an investment company, with SoftBank Vision Funds as the centerpiece for private investing. Since inception, SoftBank Vision Fund 1 has had 14 companies go public and as of March 31, 2021, generated cumulative gross investment gains of $55.0 billion^*1 and distributed $22.3 billion to LPs.^*2 Recent highlights include the IPOs of Auto1, Coupang, DoorDash, Opendoor and Relay Therapeutics, as well as the sale of OSIsoft. We believe the announced SPAC mergers of Grab and WeWork, and the pending acquisition of Arm by NVIDIA, will create additional opportunities to unlock value when those transactions close.

SoftBank Vision Fund 2^*3 is also off to a strong start. As of March 31, 2021, we invested $6.7 billion^*1 in 44 companies,^*4 and we have a robust pipeline of investments globally. The public listings of Beike, Seer, and Qualtrics have already driven up the fund more than $4.0 billion^*1 since inception.

I expect that fiscal 2021 will be an exciting year. We now have many arrows in our investing quiver and the flexibility to partner across the life cycle of companies from early stage through to IPO. Our unparalleled ecosystem will only continue to grow and become even more attractive to founders drawn by its potential to accelerate their company’s growth.

In just four years, we have built a platform that will enable us to invest in AI companies for decades to come. SoftBank Investment Advisers is now comprised of more than 300 employees across 10 global offices, and we continue to grow.
In addition to our strong investment team, we have built an organization that can support our portfolio companies throughout their life cycle.

For example, our operating group is a collection of experienced operators who help our portfolio companies enter new markets, navigate growth, and leverage the SoftBank Group ecosystem. They play a critical role in ensuring our portfolio companies can benefit from working with each other, as well as SoftBank Group companies and investments.

We also have more than 100 colleagues dedicated to control functions, including compliance, investment risk, operational risk, internal audit, valuations, and legal. Every quarter, our valuations team analyzes and values each and every one of our portfolio companies.

Our capital markets group now manages more than $50 billion of public stock. They help ensure we take a disciplined and balanced approach to monetizing our assets. As more portfolio companies list publicly, our public holdings should continue to grow.

We are steadfast in our belief that investing in the technology of the future can unlock even greater returns for the economies and societies of tomorrow.

From our investments to our social impact initiatives, we strive to have a positive impact on the world. From the start, we have aligned our work with the UN’s Sustainable Development Goals (SDGs), which provide a mission-led framework we know our founders, employees and LPs value. In fiscal 2020, many of our portfolio companies globally were in the vanguard of the response to COVID-19 through contributions such as developing medical treatments, supporting our frontline workers and supplying basic needs.

We continue to take concrete action to foster a more equitable tech and VC ecosystem that better reflects the societies we serve. Now in its second year, our Emerge program champions diversity by connecting underrepresented founders with the capital, tools and networks needed to help scale their businesses.
Applications recently opened for our second Emerge cohort, this time in Europe.
Drawing on SoftBank Group’s unique convening power, we are pleased to expand this year’s program to bring together a coalition of leading European VCs and seed-stage investors to partner in this critical endeavor.

Like Masa, I have always believed artificial intelligence will have a greater impact on the economy than the PC, the Internet or the mobile stages of the Information Revolution. Earlier technologies revolutionized a few industries, like advertising and e-commerce. We believe AI will transform every industry in the world. COVID-19 and the pandemic that followed validated Masa’s vision, and accelerated it.

Looking ahead, it is clear that the pandemic will permanently reshape our economy in ways that we are just beginning to understand. It is our view that most of the acceleration we have seen will be permanent. Once new habits are developed, they tend to stick, especially when they make your life easier.
We believe this will disproportionately benefit our portfolio companies because they are driving innovation forward in many of the industries that are benefiting from this surge in demand, including e-commerce, entertainment, healthcare, education, fintech, food delivery and logistics.

This interim period is a time of tremendous opportunity and risk, and our ability to invest and monetize wisely through this transition, and help our portfolio companies navigate it, will determine the ultimate success of both SoftBank Vision Funds.