Saudi Arabia, SoftBank aim to be world's No. 1 tech investor with $100 billion fund

Fri Oct 14, 2016 4:47am EDT
 
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By Andrew Torchia and Thomas Wilson

DUBAI/TOKYO (Reuters) - Saudi Arabia and Japan's SoftBank Group (9984.T: Quote) will create a technology investment fund that could grow as large as $100 billion, making it one of the world's largest private equity investors and a potential kingpin in the industry.

The move is part of a series of dramatic business initiatives launched by Riyadh this year as Saudi Arabia, its economy hurt by low oil prices, deploys huge financial reserves in an effort to move into non-oil industries.

Earlier this year, it invested $3.5 billion in U.S. ride-hailing firm Uber, surprising many.

SoftBank, a $68 billion telecommunications and tech investment behemoth, has also been stepping up investment in new areas. It agreed to buy U.K. chip design firm Arm Holdings in July in Japan's largest ever outbound deal.

Saudi Arabia's top sovereign wealth fund, the Public Investment Fund (PIF), will be the lead investment partner and may invest up to $45 billion over the next five years while SoftBank expects to invest at least $25 billion.

Several other large, unnamed investors are in active talks on their participation and could bring the total size of the new fund up to $100 billion, SoftBank said.

"Over the next decade, the SoftBank Vision Fund will be the biggest investor in the technology sector," SoftBank Chairman Masayoshi Son said in a statement.

At an annual rate of $20 billion, the new London-based fund could at current levels account for roughly a fifth of global venture capital investment.   Continued...

 
People walk behind the logo of SoftBank Corp in Tokyo December 18, 2014.  REUTERS/Toru Hanai/File Photo