In VC fund creation, have we passed the peak?

In venture capital, a variant on the Glengarry Glen Ross mandate is most fund managers’ modus operandi: Always. Be. Raising.

In venture capital, a variant on the Glengarry Glen Ross mandate is most fund managers’ modus operandi: Always. Be. Raising.

And it seems like VCs have picked up on that. In the last few months, even casual readers of the tech press would notice many, many stories about VCs raising big new funds. So are venture investors spinning up new funds as often as they did in the past?

VCs are certainly raising tons of money, and Crunchbase News reported earlier this week that these huge funds are bending the shape of the VC fundraising curve upward. But is that the full story? Even though 2018 has been a banner year so far for venture fund origination on the highest end of the assets-under-management spectrum, what about the market as a whole?

Aggregated venture capital and micro VC fundraising data from Crunchbase suggests that U.S.-based firms are spinning up fewer new funds than they did just a couple of years ago. In other words, the peak might be in.

Let’s take a look at the numbers, which we’ve segmented by U.S. Census region.

There are a few trends to glean from the chart above, and it comes down to pace and scale.

We’re able to see how the pace of venture fund creation varies by region. In the highly unlikely event you didn’t already know that the East and West coasts are responsible for the bulk of venture fund creation, the above chart makes that fact plainly obvious.

And at least when it comes to investors from Western and Eastern states, the difference is one of scale rather than direction. As the count of funds raised rises in the East, so it goes in the West.

Our data suggest that, in aggregate, new fund creation hit a local maximum in 2016. With more than 260 new funds announced that year, it’s a record that stretches back at least to the time of the first dot-com collapse — if it’s not an all-time record on its own.

Not all bad news

Even given historic patterns of when new funds are announced — which suggest fewer funds are announced in Q4 — matching 2017 levels of new fund creation is likely. Although nobody should hold their breath, it’s possible that 2018 will also break records for new fund creation and total capital raised.

To break the dollar volume record, VCs need to raise another $4.6 billion in new funds by the end of the year. Considering that approximately $40 billion has already been raised, this seems possible. But it’s important to remember that eighty percent of new funds are smaller than $250 million.

One of the things some might ignore about all the money currently going into venture capital funds (and, by proxy, into privately held tech startups) is that it is going to have to come back to limited partners with a hefty return.

The $45 billion U.S. VCs are on pace to raise in 2018 would have to net more than $135 billion in returns by 2028, presuming a 10-year term for the fund and a 3x realized multiple (the minimum threshold for venture scale returns).

That sounds unlikely, given that we are in the senescence of a bull cycle. But so long as public tech companies soar, SaaS booms and investors are so hungry for tech shares that middling Chinese firms can go public domestically twice in a week, there’s little reason to expect too much of a pullback in the short term.

Until the real correction comes, at which point we’ll see some far shorter bars added to our graph.

Crypto’s second bubble, Juul has 60 days and three Chinese IPOs

Hello and welcome back to Equity, TechCrunch’s venture capital-focused podcast where we unpack the numbers behind the headlines. After a long run of having guests climb aboard each week, we took a pause on that front, bringing together three of our regular hosts instead: Connie Loizos, Danny Chrichton, and myself. Despite the fact that there were […]

Hello and welcome back to Equity, TechCrunch’s venture capital-focused podcast where we unpack the numbers behind the headlines.

After a long run of having guests climb aboard each week, we took a pause on that front, bringing together three of our regular hosts instead: Connie Loizos, Danny Chrichton, and myself.

Despite the fact that there were just three of us instead of the usual four, we got through a mountain of stuff. Which was good as it was a surprisingly busy week, and we didn’t want to leave too much behind.

Up top we dug into the latest in the land of crypto, which Danny had politely summarized for us in an article. The gist of his argument is that the analogies relating crypto as an industry to the Internet may work, but most people have their timelines wrong: Crypto isn’t like the Internet in the 90s, perhaps. More like the 80s.

On the same topic, crypto companies formed a team lobbying effort, and a high-flying crypto fund is struggling to once again post strong profit figures.

Moving along, Juul is back in the news. Not, however, for raising more money or posting quick growth. Well, sort of the latter, as the government is after it. The Food and Drug Administration has put Juul on a countdown to get its act together regarding teens and smoking. That the financially-impressive unicorn is in as much trouble as it is nearly surprising.

Finally, we ran through the three most recent Chinese IPOs that hit our radar. Here they are:

  • Meituan Dianping: The Tencent-backed group buying, delivery, and everything company raised over $4 billion in its debut, which was impressive, but also short of expectations. The firm won’t begin trading until the 20th, but it’s one more massive deal that got done in 2018.
  • 111: We spent a minute on the show discussing what counts as a technology company thanks to 111. We voted that the Chinese online-to-offline pharmacy startup did in fact count. So, it’s in our list. Some notes on its debut can be found here.
  • NIO: Finally on our list was NIO, a Chinese electric car company with, as we have discussed on Equity before, a shockingly short history of revenue generation. Whether the company is a gamble or not, it did raise $1 billion in its own offering. And its stock is off like a rocket to boot.

And that was the end of things. Thanks for sticking with us, as always. Speaking of which, our 100th episode is coming up. Who should we bring onto the show to celebrate?

Equity drops every Friday at 6:00 am PT, so subscribe to us on Apple PodcastsOvercast, Pocket Casts, Downcast and all the casts.

Equity podcast live from Disrupt SF: Peak Valley Edition

Hello and welcome back to Equity, TechCrunch’s venture capital-focused podcast where we unpack the numbers behind the headlines. This week was incredibly fun. We recorded live from the first floor of TechCrunch’s Disrupt SF confab, putting us right in the middle of the action. So it was good that we had a full crew on hand to […]

Hello and welcome back to Equity, TechCrunch’s venture capital-focused podcast where we unpack the numbers behind the headlines.

This week was incredibly fun. We recorded live from the first floor of TechCrunch’s Disrupt SF confab, putting us right in the middle of the action. So it was good that we had a full crew on hand to natter about the news. From TechCrunch, Connie Loizos and Danny Crichton were on deck, along with myself. In addition to us regulars, Garry Tan joined in. He’s a managing partner at Initialized Capital.

So we had the crew, a lovely stage, and four mics. Putting that together we kicked off with some ironically non-Valley news, in particular, Amazon reaching the $1 trillion market cap threshold. The firm has since given back around $50 billion in value, but we wanted to know why it was up, and why it was down.

Segueing with some precision we tucked into the recent “Peak Silicon Valley” conversation, specifically predicated on two recent pieces from the Economist (here and here) that, in effect, ask the question is the Valley no longer what it once was? And the answer, as you can imagine, is a firm kinda.

Next up we riffed on the recent crypto meltdown. Tan was not concerned, noting that you have to have 10 percent down days to have 10 percent up days. I found that hard to stomach, but crypto remains young, per Tan, so perhaps we’ll see things calm down yet.

Next, two IPOs. First up: Elastic, a search company that seems quite young has an impressive set of numbers to show off. It’s not as hot as Snap, perhaps, but the firm is in good shape to make a good debut. And Upwork is going public as well. If Elastic is quick to IPO and quick growing, Upwork is a bit less of each. It’s older and growing more slowly.

The firms are linked by an investor, however, something that Crichton broke down for us here.

We wrapped with Caffeine’s $100 million round, and the changing pace of supergiant capital injections. And then we stopped talking, so we’ll catch you all in seven days. Thanks for being great!

Equity drops every Friday at 6:00 am PT, so subscribe to us on Apple PodcastsOvercast, Pocket Casts, Downcast and all the casts.

Zoox loses its CEO, Eventbrite is going public, and megarounds for Slack, One Medical, and Getaround

Hello and welcome back to Equity, TechCrunch’s venture capital-focused podcast where we unpack the numbers behind the headlines. This week we had a full house which was super great. TechCrunch’s Connie Loizos and Sarah Buhr held down the fort in San Francisco along with our guest, Susan Mac Cormac, a partner at Morrison Foerster where she […]

Hello and welcome back to Equity, TechCrunch’s venture capital-focused podcast where we unpack the numbers behind the headlines.

This week we had a full house which was super great. TechCrunch’s Connie Loizos and Sarah Buhr held down the fort in San Francisco along with our guest, Susan Mac Cormac, a partner at Morrison Foerster where she works on some of the most interesting deals in the private capital space. I dialed in from the home office in Providence.

It was good that we had eight hands on deck as there was more than enough news to go around. We started with the recent executive changes at Zoox, an autonomous car company that came up on the show a few weeks back when it raised $500 million.

The firm is now down its CEO after he was ousted after the round. In the founder-friendly era that we find ourselves in at the moment, this is High Drama.

Next up was the #breakingnews concerning Eventbrite, which filed to go public just before we recorded. My initial notes are here, but we’re still far from knowing where the unicorn will price. That means it’s hard to say much today, aside from the fact that the company appears to be in more than rude enough health for a flotation.

And then, the megarounds. There were three:

  • Slack is richer and more valuable than ever after raising over $400 million at a valuation of more than $7 billion. The news surprised precisely no one, but it’s again amazing to see how the enterprise chat app and budding productivity platform can raise as much as it wants, whenever it wants. The new round, of course, came after Slack put $250 million in its pockets last year. (Here’s some quick math on its new valuation, just for fun.)
  • One Medical picked up $350 million of its own, though the company doesn’t get all the money. It’s $220 million for One Medical itself, and $130 million for extant shareholders in the premium medical service.
  • Getaround raised $300 million led by SoftBank (which also invested in Slack, of course). SoftBank’s 2017 and 2018 investment cadence are already the stuff of legend. How the firm will do when returns are tallied isn’t settled, though some early wagers are bearing fruit as we noted on the show. Getaround faces competition from rival peer-to-peer car sharing service Turo, which also raised this year.

All that and we managed 1.7 jokes and 2.3 puns.

We’ll be back in a week, and don’t forget that we are coming to you live at Disrupt in about two week’s time. Stay cool!

Equity drops every Friday at 6:00 am PT, so subscribe to us on Apple PodcastsOvercast, Pocket Casts, Downcast and all the casts.

Taking Tesla private, WeWork and Uber earnings, and what happened to crypto

Hello and welcome back to Equity, TechCrunch’s venture capital-focused podcast where we unpack the numbers behind the headlines. This week was a corker. We had Alex Wilhelm in-studio with our guest Minal Hasan, founder of K2 Global, and TechCrunch’s Danny Chriton jumped in from New York to help the crew dig through the biggest and best stuff […]

Hello and welcome back to Equity, TechCrunch’s venture capital-focused podcast where we unpack the numbers behind the headlines.

This week was a corker. We had Alex Wilhelm in-studio with our guest Minal Hasan, founder of K2 Global, and TechCrunch’s Danny Chriton jumped in from New York to help the crew dig through the biggest and best stuff from the last seven days.

It’s been busy, to say the least. First, we took a look at the Elon-Musk-taking-Tesla-private-situation, which has kept Markets Twitter in suspense for days. We didn’t really get to talk about the Grimes-Azealia Banks stuff, but, hey, stay in your lane and what not. Don’t forget that the latest Tesla upheaval comes on the heels of the firm’s pretty good earnings report.

Next, we took a look at earnings. Not of public companies, mind, but two unicorns that have become so large as to require regular financial disclosure. So, we took a peek into what Uber and WeWork had cooking. In short:

Put into simple terms, WeWork’s long-term lease situation has us worried, while Uber’s losses compared to its net revenue seem kinda alright given other financial metrics. Place your own bets, of course.

Moving along we took a dig into the NIO IPO, which you probably haven’t heard about yet. It’s another electric car company, but this time from China. And it’s raising a lot after having essentially zero history as a revenue-generating company. What could go wrong!

And finally, crypto and all that has happened to your favorite coin recently. Hasan was on hand with a grip of good points on the matter. She was a pretty damn great guest.

That’s it for this week, hang tight and come see us at Disrupt.

Production note: Alex’s mic was a bit whack until the 16-minute mark. Please forgive the issue, we noticed and fixed it as fast as we could. Hugs and love! 

Equity drops every Friday at 6:00 am PT, so subscribe to us on Apple PodcastsOvercast, Pocket Casts, Downcast and all the casts.

Supergiant VC rounds aren’t just raised in China

In the venture capital market, big is in. Firms are raising significant sums to finance a growing number of large startup funding rounds.

In the venture capital market, big is in. Firms are raising significant sums to finance a growing number of large startup funding rounds.

In July, there were 55 venture rounds, worldwide, which topped out at $100 million or more, totaling just over $15 billion raised in nine and 10-figure mega-rounds alone. This set a record for venture dealmaking.

We’ve already identified approximately when the uptick in huge VC rounds began: toward the tail end of 2013. But where in the world are all the companies raising these supergiant venture capital rounds?

In response to coverage of July’s record-breaking numbers, many commenters were quick to point out that startups based in China raised six of the top 10 largest rounds from last month.

Indeed, on a recent episode of the Equity podcast discussing the supergiant round phenomenon, Chinese startups’ position in the market was a hot topic of conversation. Someone suggested that a series of large venture rounds in China may have preceded the run-up in supergiant rounds being raised by U.S. startups.

At least in the realm of nine and 10-figure venture rounds, that doesn’t appear to be the case. The chart below breaks down the monthly count of supergiant rounds by the company’s country of origin.

Here is what this data suggests:

  • The first major run-up in nine-figure dealmaking took place in the U.S. around Q1 2014, whereas in China that first run-up didn’t occur until Q4 2014.
  • Especially in the last 24 months or so, supergiant round volume in China and the U.S. is highly correlated, perhaps implying competition in the market.
  • We can see, very clearly, the mini-crash in the U.S. through the second half of 2015. For its part though, China hasn’t yet had a serious “crash” in supergiant rounds during this cycle.
  • Startups outside the U.S. and China are beginning to raise supergiant rounds at a faster rate, although the uptick is significantly less dramatic.

What’s less obvious in the chart above is just how quickly China became a mega-round powerhouse. The chart below plots the same data as above, except this format shows what percent of mega-rounds originated in each market. Additionally, rather than displaying somewhat noisy monthly amounts, we aggregated data in six-month increments.

After the start of 2013, it only took a couple of years for Chinese companies to consistently account for roughly 30 to 40 percent of the $100 million-plus VC rounds raised in any given six-month period.

This also reinforces a trend shown in the prior chart: since the beginning of 2017, Chinese startups and U.S. startups are raising roughly the same number of supergiant venture rounds as one another. That number has risen fairly consistently over time.

Before concluding, it’s worth mentioning that our definition of “supergiant” is ultimately arbitrary. Indeed, $100 million is just a tidy, round-numbered threshold to measure against. Our findings would be similar (if somewhat less dramatic) if we counted, say, the set of rounds raising $50 million or more.

The important underlying trend is that round sizes are getting larger on average. And a supergiant wave of money ultimately lifts all rounds, at least a little bit.

Stay up to date with recent funding rounds, acquisitions and more with the Crunchbase Daily.

Slack raises, Dropbox and Snap report earnings, and Magic Leap is real

Hello and welcome back to Equity, TechCrunch’s venture capital-focused podcast where we unpack the numbers behind the headlines. This week Matthew Lynley and Alex Wilhelm were joined by 500 Startups CEO Christine Tsai for what turned out to be a super packed episode. We kicked off with the latest from Slack: $400 million new dollars at a shiny, […]

Hello and welcome back to Equity, TechCrunch’s venture capital-focused podcast where we unpack the numbers behind the headlines.

This week Matthew Lynley and Alex Wilhelm were joined by 500 Startups CEO Christine Tsai for what turned out to be a super packed episode.

We kicked off with the latest from Slack: $400 million new dollars at a shiny, new $7 billion valuation, according to TechCrunch. The new capital comes after the firm raised a huge sum last year from SoftBank’s Vision Fund.

We dug into why the company would raise again, and what competitors it has left after the Atlassian deal.

Next up, two earnings reports. Continuing our tradition of keeping tabs on recent tech IPOs, we talked through Snap and Dropbox which reported earnings this week. Both lost ground after doing so. Ironically, they each beat financial expectations.

Snap ended up dropping value over a DAU decline, and Dropbox’s fall is still a bit undetermined. But by the time this episode ships, perhaps the market will have figured it out.

Next up we scrolled through the key reviews of the commercially available Magic Leap headset that is out at last. It’s a bit pricey, and a bit not-what-people-expected, but the well-funded startup seems to have avoided a complete miss. Its second-generation device may prove to be more impactful.

And finally, big news from China. As has become the norm on Equity, a few big Chinese rounds captivated us. This time it was the Manbang news, and what’s going on at Bytedance.

All that and we’ll be back in a week’s time. Stay cool!

Equity drops every Friday at 6:00 am PT, so subscribe to us on Apple PodcastsOvercast, Pocket Casts, Downcast and all the casts.

July sets a record for number of $100M+ venture capital rounds

In July 2018, the tech sector’s leisure class — venture capitalists — kicked investments into overdrive, at least when it comes to financing supergiant venture rounds of $100 million or more. With 55 deals accounting for just over $15 billion, July likely set an all-time record for the number of huge venture deals struck in a single month.

In July 2018, the tech sector’s leisure class — venture capitalists — kicked investments into overdrive, at least when it comes to financing supergiant venture rounds of $100 million or more (in native or as-converted USD values).

With 55 deals accounting for just over $15 billion at time of writing, July likely set an all-time record for the number of huge venture deals struck in a single month.

The table below has just the top 10 largest rounds from the month. (A full list of all the supergiant venture rounds can be found here.)

It’s certainly a record high for the past decade. Earlier this month, we set out to find when the current mega-round trend began. We found that, prior to the tail end of 2013, supergiant VC rounds were relatively rare. In a given month between 2007 and the start of the supergiant round era, a $100 million round would be announced every few weeks, on average. And many months had no such deals come across the wires.

Of course, that hasn’t been the case recently.

Why is this happening? As with most things in entrepreneurial finance, context matters.

There are some obvious factors to consider. At the later-stage end of the spectrum, the market is currently awash in money. Billions of dollars in dry powder is in the offing as venture investors continue to raise new and ever-larger venture funds. All that capital has to be put to work somewhere.

But there’s another, and perhaps less obvious, cog in the machine: the changing part VCs play in a company’s life cycle. The current climate presents a stark contrast to the last time the market was this active (in the late 1990s). Back then, companies looking to raise nine and 10-figure sums would typically have to turn to private equity firms or boutique late-stage tech investors, or raise from the public market via an IPO.

Now some venture capital firms are able to provide financial and strategic support from the first investment check a private company cashes to when it goes public or gets acquired. On the one hand, this prolongs the time it takes for companies to exit. But on the other, some venture firms get to double, triple and quadruple down on their best bets.

But as in Newtonian physics, a market that goes up will also come down. The pace of supergiant funding announcements will have to slow at some point. What are some of the potential catalysts for such a slowdown? Keep an eye out for one or more of the following:

  • U.S. monetary policy could change. As stultifyingly boring as Federal Reserve interest rate policy is, very low interest rates are a major contributor to the state of the market today. With money so cheap, other interest rate-pegged investment vehicles like bonds perform relatively poorly, which drives institutional limited partners to seek high returns in greener pastures. Venture capital presents that greenfield opportunity today, but that can change if interest rates rise again.
  • A sustained public market downtrend for tech companies. While everything was coming up Milhouse in the private market, a few publicly traded tech giants got cut down to size. Facebook, Twitter and Netflix all reported slower than expected growth, leading to a downward repricing of their shares. So far, most of the steepest declines are isolated to consumer-facing companies. But if we start to see disappointing earnings from more enterprise-focused companies, or if asset prices remain depressed for more than just a couple of months, this could slow the pace of large rounds and lower valuations.
  • Narrowing or vanishing paths to liquidity. For the past several quarters, the count of venture-backed companies that get acquired has slowly but consistently declined, a trend Crunchbase News has documented in its quarterly reporting. At the same time, though, the IPO market has mostly thawed for venture-backed tech companies. Even companies with ugly financials can make a public market debut these days. But if IPO pipeline flow slows, or if otherwise healthy companies fail to thrive when they do go public, that could spell bad news for investors in need of liquidity.

All this being said, there’s little sign that the market is slowing down. Crunchbase has already recorded four rounds north of $100 million in the first two days of August. Most notably, ride-hailing company Grab snagged another $1 billion in funding (after gulping down $1 billion last month) at a post-money valuation of $11 billion.

If you believe the stereotypes, venture investors are either already on vacation or packing their bags for late summer jaunts to exotic locales at this time of year. But, as it turns out, raising money is always in season. So even though the dog days of summer are upon us, August could end up being just as wild as July.

Cisco buys Duo, Brandless raises $240M, and Apple broaches $1T

Hello and welcome back to Equity, TechCrunch’s venture capital-focused podcast where we unpack the numbers behind the headlines. This week TechCrunch’s Matthew Lynley and Crunchbase News’s Alex Wilhelm were joined by Jyoti Bansal, the founder of AppDynamics and a partner at Unusual Ventures, among other startup work. Our own Connie Loizos was off this week. This episode was […]

Hello and welcome back to Equity, TechCrunch’s venture capital-focused podcast where we unpack the numbers behind the headlines.

This week TechCrunch’s Matthew Lynley and Crunchbase News’s Alex Wilhelm were joined by Jyoti Bansal, the founder of AppDynamics and a partner at Unusual Ventures, among other startup work.

Our own Connie Loizos was off this week.

This episode was effectively a news grab-bag. There’s a little of everything: public company drama, big rounds, acquisitions, and more.

Up top: Apple’s broaching of the $1 trillion barrier, which some people called early and some people called late. It depends on how you were counting. But the venerable consumer electronics giant did indeed manage to hoist its market cap over the trillion dollar mark, making it the first American company to do so.

But as we all wind up agreeing, it’s just a round number.

Moving along Sonos’s IPO had a good first day but only after a disappointing pricing run. Or as Lynley explains on the show, the firm had to price under its target range to go out, but then closed above that target range by the end of its first day’s trading. This is more evidence that pricing an IPO is an occult art of sorts. (More here on the company’s numbers.)

Scooting along, Duo Security is exiting to Cisco for $2.35 billion. This deal came at quite literally the perfect moment as the company our guest founded sold to Cisco for $3.7 billion last year. Why? Recurring revenue, which is seeing its value rise.

And finally, Brandless, which picked up a massive $240 million round led by the ever-hungry SoftBank Vision Fund. A deal to which I had a question: Why?

All that and we even managed to tell a joke and mangle a segue. More next week!

Equity drops every Friday at 6:00 am PT, so subscribe to us on Apple PodcastsOvercast, Pocket Casts, Downcast and all the casts.

WeWork is just one facet of SoftBank’s bet on real estate

This week WeWork announced that its Chinese subsidiary — WeWork China — raised an additional $500 million in capital in a deal led by SoftBank, Temasek Holdings and others. The deal reportedly values the Chinese branch of the shared workspace and real estate management company at $5 billion, up from $1 billion (post-money) in the round WeWork China announced […]

This week WeWork announced that its Chinese subsidiary — WeWork China — raised an additional $500 million in capital in a deal led by SoftBank, Temasek Holdings and others. The deal reportedly values the Chinese branch of the shared workspace and real estate management company at $5 billion, up from $1 billion (post-money) in the round WeWork China announced almost a year ago in July 2017.

SoftBank rarely doubles down on a particular company. At time of writing, SoftBank itself has made 175 investments in 144 different companies, according to Crunchbase data. Of those, just 23 companies raised more than one round from SoftBank. And in conjunction with its China branch, with four cumulative transactions on record, WeWork is tied for first place in a ranking of companies most-engaged with SoftBank’s investment arm.

That being said, SoftBank’s investment strategy appears to be one of taking stakes in leading companies from a given sector. And although it’s sometimes difficult to tell just how large some of those stakes are as a percent of equity in the company, SoftBank finds itself involved in many companies’ biggest rounds to date.

Take WeWork for example. If you take all of the equity funding rounds raised by its main corporate entity and regional offshoots like WeWork China and WeWork India, you’ll find that SoftBank was either the sole investor, the round leader or a syndicate participant in the rounds that delivered the lion’s share of capital to the company.

If the market opportunity is big, SoftBank will typically make investments in regionally dominant companies operating in that sector. After all, if worldwide dominance is difficult to obtain for any one company, SoftBank is so big that it can take positions in the regional leaders, creating an index of companies that collectively hold a majority of market share in an emerging industry.

It’s a bold strategy that involves taking some big risks and writing big checks. As a result, SoftBank is typically the largest single investor — in terms of dollars committed — in the fastest-growing companies in an industry.

Real estate is just one theme

WeWork is just one facet of SoftBank’s real estate investment efforts. The table below shows a selection of SoftBank’s investments in the real estate and construction sector. It’s ranked by the amount of money invested in rounds involving SoftBank (either as the sole investor or as part of a broader syndicate). We also show what percent of total known equity funding SoftBank-involved rounds account for.

SoftBank’s strategy of writing big checks to successful startups in large and growing market segments extends past real estate, of course. It touches many other industries, including e-commerce and logistics, insurance and healthcare, and, perhaps most contentiously, ride-hailing and on-demand transportation.

SoftBank also has a strong portfolio of artificial intelligence companies to flex at some point down the road. It has invested in the likes of Nvidia, Improbable, Brain Corporation, Pentuum and others. Furthermore, its stakes in Mapbox and Cruise Automation are advantageous to SB Drive, its own autonomous vehicles effort.

SoftBank is one of the cases of everything old being new again. In the late 1990s, SoftBank and its founder Masayoshi Son were some of the biggest investors in tech. Then, like today, Son aimed to forge a kind of virtual Silicon Valley in SoftBank’s portfolio, a platform for symbiotic, cooperative relationships and business partnerships to emerge. There’s definitely the possibility for this sort of bonhomie to emerge today, given the thematic nature of the firm’s investment strategy. But at the same time, Son is famous for losing a lot of money when the first tech bubble collapsed. It remains to be seen whether the firm will make it out on top the second time around.