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Comment by iamben | Hacker News Reader

I don't know a huge amount about SoftBank - but what have they backed that's successful / working / making a profit? They seemed to be attached to (at least in my 'bubble') a lot of stories about failing or troubled companies and I rarely see a "SoftBank backed XYZ does amazing things!" (although I appreciate there's a journalistic angle here).

Edit: Thanks replies! Definitely seems like a bias in reporting here :-)

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There is a lot of data out there given they are publicly traded, although I don't like their presentations: [0]

13 IPOs for Vision Funds I and II

Fair Value of both funds: $116.7b

Investment Gains: $27.6b

Dry Powder: $19.5b

Distribution to LPs: $15.2b

'SoftBank backed does amazing things' is always relative especially because the failures are much more media-friendly.

Case in point: There are only 7 posts on Guardant Health on HN. What they are doing in liquid biopsy for cancer treatment is remarkable, and yet we never comment on that.

[0] https://group.softbank/system/files/pdf/ir/presentations/202...

>13 IPOs for Vision Funds I and II

An IPO, in-and-of-itself, isn't a "success". In fact, I'd fathom that at least half the time it's insiders dumping garbage on the public.

Actually in the case of GP and GGP comment, this is EXACTLY what represents a financial success. If Softbank was able to exit their position through IPO and the company delivered great returns then Softbank's investment was a success.

Your sentiment is very broad and repeatedly echoed across HN, but in this comment chain it doesn't make any sense because they are asking about "making a profit"

> I'd fathom that at least half the time it's insiders dumping garbage on the public

What is the data you have to back this?

Goldman Sachs analyzed 4,481 U.S. IPOs over the past 25 years and this is one of their conclusions:

"Since 2010, IPOs with annual sales growth greater than 20% have been more likely to outperform Russell 3000 over three years than a comparable, slower-growing IPO"

Jay Ritter, professor at University of Florida, has a great table [1] that shows that companies with $100m in ARR who IPOed from 1980-2018 (n=3,299) have an average of 40.8% in returns on a buy and hold strategy 3 years after IPO, compared to 0.8% from the market.

More data here:

[0] https://www.barrons.com/articles/money-losing-ipo-stocks-can...

[1] https://site.warrington.ufl.edu/ritter/files/IPO-Statistics....

https://www.goldmansachs.com/insights/pages/top-of-mind/the-...

https://site.warrington.ufl.edu/ritter/files/2015/06/Why-Has...

Right now Bytedance (TikTok) is their top winner. Their stock just doubled last year, so they are not as bad as their reputation. It looks just biased media to me at this point.

To be fair, a lot of stocks have doubled in the last year and softbank as a company does more than investing.

The founder was an early backer of Alibaba.

This had a phenomenal ROI but has a sample size of 1.

They paid a high price to purchase ARM, which has since been very successful.

I would be interested in an ROI breakdown for different time windows. I agree they have backed several high profile implosions.

Well... ARM has been very successful for the last 20 years.

But SoftBank hasn’t owned it for 20 years.

That's what I'm saying. SoftBank has nothing to do with ARMs success. Nor was buying ARM a particularly inspired buy.

Softbank made an interesting playbook. They made a bet that given their fund size (magnitude order larger then VC funding at the time) they could find large scale opportunities fund those companies and outlast longer and out muscle the competition based largely on size of capital alone. I.e. hold on to losses before the competitors ran out of gas and then take market share. As a result competition has had to up the amount of funding sizes so that they can compete with Softbank investments or risk not being able to keep marketshare.

Also creates some really perverse incentives in that you can sustain an unsustainable business model much longer driving out other businesses/competition at the same time then VC traditional could. It is a pretty big bet and has lots of capital in the mix - founder of Softbank has a history of high risk bets (not always going well either I would add).

> can sustain an unsustainable business model much longer

What is the data you have to back that any of these business are unsustainable: Uber, Guardant Health, Doordash, 10X Genomics, Slack, Opendoor, Seer, Beike?

I don't and the broader market neither. If you do, shorting is a great strategy to give you an outsize payoff

Unsustainable was the wrong word. Correction -->. "can sustain a higher cash burn for longer before getting to revenue positive"

Last I checked, Uber, DoorDash and Slack weren’t profitable (and I don’t know about the others).

Doesn’t that mean there’s some truth to that comment?

Alibaba

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