Participants walk in front of a monitor that displays SoftBank Group president and CEO Masayoshi Son giving a speech at the SoftBank World 2018 conference on July 19, 2018 in Tokyo, Japan.
Tomohiro Ohsumi | Getty Images | Getty Images
Japan's SoftBank has gone from the telecommunications giant to become known worldwide as a powerhouse in technology investment. And their bets on familiar names, from Uber to WeWork, made headlines, not just because of the fights of such companies for profit.
An executive at the company's $ 100 billion Vision Fund gave a second look at how the technology-focused fund decides which companies it invests in – and why making money is not necessarily a deciding factor.
"We are looking for companies that are dealing with very significant problem points," said EMEA and Asia managing partner Munish Varma at a Fintech or technology technology fair held in London on Monday. This means companies that are "dealing with markets that are huge with a product that clearly meets their needs."
For the context, Varma was speaking alongside Rishi Khosla, co-founder and CEO of online bank OakNorth, which the SoftBank fund invested earlier this year. OakNorth – unlike many technology companies that have not yet made a profit – has been profitable since 2017.
<! – ->
Varma also explained that the fund "is not very focused on when a company makes a profit", but on "if the deal makes sense" – the idea is that short-term profits are not necessarily an indicator of long-term value and success .
SoftBank has become an almost ubiquitous force in the technology industry in recent years as the company has invested billions of dollars in products like Uber, WeWork and Slack. The group's stake in Uber is expected to be worth about $ 10 billion, when the giant's mount goes public in May, according to a regulatory document.
Further explaining the thinking behind the Vision Fund's investments, Varma emphasized that it focuses predominantly on companies in the growth stage, and that these companies are in no hurry to seek stock listing soon.
"In recent years, companies have been deprived for much longer, but that does not mean that capital needs have fallen," he said.
Khosla – who was once an investor in companies such as PayPal – echoed this sentiment, saying it was not "imperative," even if his digital lender launched an initial public offering. In an interview with CNBC on Monday, he said that the titan of technology investment provides "patient capital, which does not necessarily consider quarterly results."
A recent technology IPO – that is, Lyft's – has suffered sharp declines since its debut in the market, amid concerns about its ability to make a profit.