who is the world's biggest tech investor
the answer might surprise you it's
Japanese company Softbank it has piled
money into tech startups uber slack
Alibaba bite dance and these are just a
few of its high-profile investments with
97 billion dollars in assets its vision
fund is the biggest private pool of
money ever raised but it is the nearly
11 billion it has sunk into we work that
has put the Japanese company and its
investment fund under scrutiny the
shared workspace provider has seen its
valuation slashed by 70%
the massive downgrade has raised
concerns about whether Softbank vision
fund wields more dollars than sense
Softbank was founded by Masayoshi Son in
1981 to distribute computer software
today it has interest in
telecommunications internet
transportation finance media robotics
venture capital and much more this
entrepreneurial zeal has made masa as
he's known Japan's second richest man it
took his vision Fund just under one year
to raise that 97 billion mostly from
sovereign wealth funds but that money is
not exactly what it seems most venture
capital funds are based on equity but
the vision fund works a little
differently roughly 14 billion porting
by investors is in the form of preferred
shares that work like debt only Softbank
has a full equity stake
that means the vision fund has to find
up to 2.8 billion in interest payments
each year Softbank finds that money by
selling stakes for a higher price or by
listing companies on the public market
the fund has recorded annual returns of
29 percent for investors based on
company's sky-high valuations
the problem is few of them are actually
profitable those that have tested their
valuations by listing on the stock
market haven't lived up to the hype
shares in ride-hailing group uber and
messaging company slack have both
plummeted since going public undeterred
Massa has just unveiled the vision fund
to however this time investors are
proving a lot more cautious the high
risk strategy of betting on untested
business models and paying huge
dividends on companies that are not yet
profitable could be the vision funds
undoing that would hit soft banks bottom
line but the real damage would be to its
reputation and that of its flamboyant
founder