The man who runs the $100 billion SoftBank Vision Fund dismisses the idea that his firm values companies too high - even after Uber and WeWork have struggled to live up to extreme valuations
- SoftBank Investment Advisors CEO Rajeev Misra, who oversees the $100 billion Vision Fund, denied that the fund overvalues companies in a rare interview with the Nikkei Asian Review.
- Misra said the short-term price doesn't matter if the company is successful in the long run.
- Softbank has come under fire after its lofty valuations have been an issue for Uber - which is trading below its IPO price - and WeWork, which recently scrapped plans to go public.
- Read all of Business Insider's WeWork coverage here.
Softbank's Vision Fund has come under fire since WeWork's decision to postpone its initial public offering, with the massive $47 billion valuation they assigned the company firmly in the crosshairs.
Put simply, the investors who were pitched the IPO didn't think the company was worth that much, even after it sought a vastly reduced $15 valuation. There were, of course, many other complicating factors, but that hasn't stemmed criticism that the Vision Fund is pumping these companies up too much before seeking other investment.
The Vision Fund has faced similar scrutiny around once-highly-touted Uber, which is currently trading more than 30% below its offer price after going public at a valuation of $82.6 billion. The company's struggles are indicative of a broader backlash around money-losing unicorns.
Rajeev Misra - the CEO of SoftBank Investment Advisers, who also leads the $100 billion Vision Fund - addressed these concerns in a rare interview with the Nikkei Asian Review. And he vehemently denied that his fund's valuations are too extended.
"Whether you buy [at] 10% more or less valuation, does it matter if we're looking for three times return?" Misra told the Nikkei Asian Review. "If you think your $1 is going to become $3, whether you pay $1.1 or $1 [is less important]" he said, according to the report.
Misra said the Vision Fund is being patient with its investing, and declined to comment on WeWork.
He also said that Softbank's Vision Fund 2 will continue the focus of investing in artificial intelligence-driven tech companies disrupting industries. The second fund was announced in July and is scheduled to launch by the end of 2019. It has $108 billion in pledged from the likes of Apple, Microsoft, and Japanese banks, according to the report.
The Vision Fund is also developing a group called "IPO readiness," Misra told the Review, to help companies go public and avoid performances akin to WeWork and Uber.