I wonder if his investments could really trigger something like that. Are there other investments of the Vision fund that are falling apart besides WeWork and Wag?
https://www.businessinsider.com/running-list-softbank-invest...
Now that said, it is expected that most investments in any VC portfolio will fail! Something like a 70% failure rate, with 20% being moderately successful, and 10% being very successful is considered very good for the VC industry. But at the end of the day it's ROI - you make money or you lose money. I think SoftBank is going to lose more money than all the other VC firms simply because they started with more money to lose.
1) Uber strategically is looking pretty good. They are the market leader in most countries and their Uber Eats business is turning out to be quite lucrative.
2) Self driving cars is a long term project so of course Cruise isn't going to have anything released just yet.
3) Boston Dynamics just launched their latest robot and has already seen pretty good adoption amongst enterprise customers. There is a huge need just in the resources industry for technologies to assist with compliance. Let along going more mass-market like construction sites.
4) Light have pivoted to being an autonomous car sensor company. And as we know there is significant potential demand in this space.
5) Nuro actually has more potential than most of the self driving car companies around by aggressively focusing on a single use case i.e. consumer goods delivery.
Uber is hemorrhaging money and are still competing against Lyft. What is their path towards profitability other than raising prices and losing customers? How do they become anything other than a glorified taxi company? Even if you disagree with me, you can't deny that the stock is trending downwards right now and is expected to continue to fall until after the lockup period for employees is up - that's when I think we'll see a glimpse of what Uber is really worth.
Boston Dynamics has been passed around constantly because nobody wants to keep them once they realize they can't make money. Spot is a cool robot, but they don't release a price. How many people want to spend the better part of $100k (or a leasing option) on something with incredibly limited utility? The market is tiny since the military keeps rejecting their machines.
If you believe in self-driving being the future, fine. Then that's a logical bet. I adamantly believe self-driving is like nuclear fusion - it's decades and tens of billions of dollars away from being commercially viable, if ever.
> Being pretty negative on those companies.
That's because I know how easy it is to make demoware and how hard it is to make a real product.
Just curious, what's wrong with that? A global taxi dispatching service that's always available, always (debatably) efficiently routing drivers to passengers sounds like a game-winning plan. Regular taxi dispatching services weren't doing these things well, on top of just sucking since they had no real competition for so long.
It just means Uber is a failed investment for SoftBank.
While that's true overall, I don't think those expectations are the same for the kind of very-late-stage, pour rocket fuel on the fire investments that the Vision Fund is making.
For seed-stage investing, definitely.
The problem for late-stage investors is that it's really hard to get the same "grand slam" economics on your winners that early-stage investors can, so it's harder to make up for a bunch of washouts.
Which investments are doing well? Maybe Paytm?
It's about being able to build autonomous restaurants. Combine that with autonomous deliveries and you have the potential for food to be delivered to people without any people involved.
Given we have an ageing population which may involve lots of people unable to leave the house this could be a trillion dollar market.
achieving capital intensive goals either involves having strong cash flow to reinvest into your R&D (which is what Amazon did) or having continued cash infusements (which is the Softbank strategy). WeWork is a great example of what happens when the money runs out.
the Softbank-specific angle here is that they promised 7% yearly payouts to the Saudis. the yearly dividend means that they need to extract liquid cash value out of their investments each year. surely you would agree that Zume and other similar investments are long-term speculations, and in the short term are not likely to pay much of a dividend or return through IPO either. however, Softbank is incentivized to push their investments to return value in the short term. so I'm personally very skeptical that their short-term commitments can allow them to be good stewards of companies with very long-term ambitions.