A leading partner at the SoftBank Vision Fund says it's "not too focused on when a company makes a profit," but on "whether the business model makes sense" when considering whether to invest.
Speaking at the Innovate Finance Global Summit yesterday, managing partner at SoftBank Investment Advisers Munish Varma said: “I don’t think it’s necessarily a good thing for companies that are scaling rapidly, can scale rapidly, to focus on having a short-term profit,” adding, "as long as there’s a path to profitability.” That's good news for portfolio company Uber.
The $100 billion Vision Fund was launched in 2017 and focuses on late stage growth investments, and with the likes of WeWork and Slack in its portfolio, it's staring down the barrel of some major exits this year.
"We look for businesses that are addressing very significant pain points - addressing markets that are massive, with a product that clearly satisfies their needs," Varma said yesterday.
The management team can also come under intense scrutiny. When Varma spoke to one of Softbank's portfolio companies, UK fintech darling OakNorth, in a fireside chat, he sung the praises of cofounder Rishi Khosla, calling him a "world class entrepreneur."
SoftBank desires its founders to be "ambitious, share our vision for the future, and have the energy and stamina to actually execute the vision," he explained.
Addressable market is also a high ranking concern, with the Vision Fund looking for leaders in their markets who "think big".
Last mentioned was a readiness to scale. On this note, OakNorth's founder outlined his own ambitious plans for fintech, signalling that SoftBank can help the startup address the massive SME loans market and expand globally.