Source: i Dark Horse
Sun Zhengyi has made another big move.
Author: Xiao Feng
According to the latest data from the analysis platform WhaleWisdom, Softbank founder Sun Zhengyi led his Softbank Vision Fund to quietly complete a wave of crazy moves recently, selling and reducing the holdings of Coupang, the largest e-commerce platform in South Korea, DoorDash, the largest online food order demand aggregator in the United States, Grab Holdings, the largest travel platform in Southeast Asia Equity of star companies such as Paytm, India's largest payment platform.
According to one analyst, "Sun Zhengyi's crazy move is characterized by forced escape." Because the above portfolio has made the total amount of Softbank Vision Fund disappear by nearly 29 billion dollars (about 209.7 billion yuan). In addition to fleeing from the once most promising Internet industry, Sun Zhengyi also sold part of the shares of ARM, the global chip leader, and reduced his holdings of "AI Four Little Dragons" Shangtang Technology, "which is known as comprehensively tackling chips and AI, and fleeing from chips and AI." Is Sun Zhengyi, a "dreamer", trying to get rid of the investment "pie" painted in the past?
01
"Sun Zhengyi, stop pretending."
He personally tore up the investment "pie" drawn in the past.
In 2019, Sun Zhengyi, who has not yet quit Alibaba's board of directors, has a glorious future. He shouted out a more bold plan in a thunderous roar, "raising $100 billion of Softbank Vision Fund II, and investing in the world's greatest companies in the next five years."
Sun Zhengyi's boldness is related to the phased investment achievements of the first phase of Softbank Vision Fund. In 2017, with the goal of "investing in the next Alibaba and Yahoo", Sun Zhengyi established the world's largest VC "SoftBank Vision Fund L.P." Chinese translation Softbank Vision Fund. According to the investment plan, the fund raised $100 billion in the first phase, with a term of five years. At that time, the world's richest families and enterprises scrambled to "pay" for Sun Zhengyi. Softbank Vision Fund won the Middle East Royal Sovereign Fund, Apple, Qualcomm, Foxconn and other heavyweight LPs.
"Five years are a cycle with ups and downs." The first return harvest period of Softbank Vision Fund is 2022. It is reasonable to say that "it will be known whether the investment is good or not in 2022", but Sun Zhengyi did not wait until 2022 to share a "good news" of Softbank Vision Fund in 2019 in advance.
In the "Good News", Softbank Vision Fund has made 71 investments in the first phase, amounting to US $64.2 billion, with a book return of 62%. This "good news" triggered a global VC/PE shock, and also added points to the prospect of the primary market. Sun Zhengyi is firmly optimistic about the development of the global Internet industry in the first phase of the investment portfolio of Softbank Vision Fund, and believes that no one understands the evolution trend of the wind outlet better than him. "By the end of the exit period, the overall return will be far more than 62%."
"Everyone knows the cycle. What is the most scary thing for investors when they are happy up and frustrated down? The most scary thing is that when they can't get out of the uplink, they will go down." Sun Zhengyi's "happy report" is very happy. He is happy to go up in the Internet cycle.
Of course, Sun Zhengyi did it in a planned way. He can't wait to raise another 100 billion dollars. After the "good news", he immediately drew a "new cake" for investment, and the second phase of Softbank Vision Fund was launched immediately. However, as the new five-year cycle nears its expiration, the global dollar investment environment has changed. The arrival of the "Black Swan" in 2020 prompted the Federal Reserve to introduce a package of radical policies, bringing many variables to the market.
The variables overturned the layout of Sun Zhengyi, and made Softbank Vision Fund suffer heavy losses. The new five-year cycle just covers the exit of Softbank Vision Fund Phase I. The year 2022 was supposed to be a highlight for LP to witness Sun Zhengyi's amazing returns, but he became the biggest hole in venture capital history.
The first five years of Softbank Vision Fund ended in a fiasco. In fiscal year 2021 alone, the fund lost $26.2 billion in investment, while Sun Zhengyi personally owed Softbank $4.7 billion. In order to calm the anger of the Middle East royal family, Apple, Qualcomm and other LPs, he used a move to "get rid of the shell" to end the first phase of Softbank Vision Fund, "Farewell to Softbank and quit VC" bowed to a group of shareholders and "the work was handed over to CFO".
At that time, the global media believed that "Sun Zhengyi ended his career as a venture capitalist by dismissing classes, which can be regarded as an explanation to LP."
It is worthy of being "the first global investment scam". Sun Zhengyi, who has read the Thirty six Stratagems well, has already planned to spend time in secret. He took the opportunity of "getting rid of the golden cicada" to draw a "new cake" - the chip of tackling difficulties, seize the new wind of the world, and take back everything lost.
02
In fact, Sun Zhengyi can't really say goodbye to venture capital.
The second phase of Softbank Vision Fund is still in operation.
But Sun Zhengyi needs to draw the "new cake" first, and the "new cake" that will support his next story is the British chip company ARM, which was "accidentally" bought with $31 billion in 2016. At that time, Sun Zhengyi's career was booming, and the Softbank Vision Fund was ready to come out, but the outside world's impression of him mainly stayed on the Internet, "the times made Softbank". So Sun Zhengyi decided to expand the investment boundary and venture into chips.
This is why he paid a lot of money to buy ARM. When he first bought the company, Sun Zhengyi had a good plan. After a lot of packaging and selling at a good price, plus the popularity of the first phase of Softbank Vision Fund, Sun Zhengyi got some upstream and downstream customers for ARM with the help of his fund investment, which can be described as "killing two birds with one stone". However, the attack of "Black Swan" not only disrupted Sun Zhengyi's investment pace, but also made ARM in a desperate situation.
Sun Zhengyi didn't want to wait any longer. He searched the world for "plate collector" with a price of more than 60 billion dollars. After looking for half a year, no one accepted the offer. "It seems that Sun Zhengyi has lost face in the chip field." In a rage, he "sold" ARM at a valuation of $20 billion. As expected, "discount" is always easy to use. Huang Renxun, founder of Nvidia, a "smart Chinese" who wants to expand in the United States, came to pick up the leak, almost facilitating the world's largest chip acquisition.
Finally, the transaction failed. One reason is that regulators in various countries worry about the "oligopoly pattern". There is also an anecdote that, "Huang Renxun was too shrewd. He still thought $40 billion was expensive and wanted to cut more than $30 billion. He once again angered Sun Zhengyi, felt humiliated, and the deal broke up."
The world's largest chip acquisition case overnight became the world's largest chip acquisition failure case. What Huang Renxun didn't know was that Sun Zhengyi had been eyeing him ever since. "Sun Zhengyi can't hang on his face", while "saying goodbye to Softbank and quitting venture capital", he drew "new cakes" and ran to ARM to avoid the limelight.
He regards ARM as a new journey in life, a business in his later years. He said, "Before I bought ARM, I fell in love with this company. I will focus on the development of ARM, witness the next explosive growth, and devote myself to it. ARM is very important for the whole mankind."
Don't mention that Sun Zhengyi won sympathy from the outside world when he went to ARM. Some American media praised the transformed Sun Zhengyi, "Investing in entrepreneurship, the dream of Japan's richest man, will benefit mankind." The external public opinion is loose, and the anger of internal shareholders against Softbank is gradually passing away. "Time is the best medicine", the second phase of investment of Softbank Vision Fund was slowly launched, and "the greatest companies will be invested in countries around the world in the next five years".
Having learned the lesson of the downward trend of the first fund cycle, Sun Zhengyi revised his investment strategy, "focusing on the Internet, supplemented by intelligent manufacturing, chips and AI." Sun Zhengyi, who became famous for Internet investment, has always been unable to get rid of the Internet. The valuation of Internet investment is growing fast, and it is also easy to tell stories.
As for intelligent manufacturing, chips and AI, to some extent, Sun Zhengyi will use the investment portfolio of Softbank Vision Fund Phase II to cooperate with ARM's growth. The weakness of ARM is that there is not enough imagination space. Although it is in the first tier of CPU consumer electronics, its market value is not high. It comes from the fact that the number one of global consumer electronics shipments is mobile phones, and the number one of mobile phones is Samsung. Samsung is not only a CPU supplier of ARM. So, ARM is powerful, but it depends on the "customer"'s face. Otherwise, how could Sun Zhengyi "sell" ARM? Huang Renxun had already prepared the money well.
03
Speaking of Huang Renxun, Sun Zhengyi seemed to "really stare at him".
Unable to sell ARM, Sun Zhengyi "determined to start a business" to benefit mankind, so the IPO is regarded as the ultimate journey of his entrepreneurship.
ARM's IPO in the US stock market has been noisy for a long time, but it has not been smooth. It coincides with Nvidia's massive attack on AI chips, disturbing Wall Street. Sun Zhengyi couldn't sit still. He asked ARM to cut into AI chips, and even the entire Softbank Vision Fund II would also invest in related industries. This move satisfied Wall Street and smoothed the barriers to IPO in the US. In September 2023, ARM went public successfully, rising 25% on the first day, with a market value of US $67.9 billion.
"Sun Zhengyi, who bought ARM with $31 billion, won a beautiful turnaround." Boosted by ARM, Softbank Vision Fund also ushered in a phased "victory". According to the 2023 financial year report released by Softbank, the Softbank Vision Fund has made a profit of $822 million. ARM has performed well since its listing, and its market value has nearly doubled to $122 billion by virtue of "Nvidia Yuguang".
At first glance, Sun Zhengyi seems to have won. The noise of global AI gave him confidence to draw the next "new cake". In 2024, the biggest expectation of the outside world for Sun Zhengyi is to "raise $100 billion to create AI chip company code named Ixie Naqi and challenge Nvidia."
Sun Zhengyi's "new cake" was undisguised and directly targeted Nvidia. In other words, the growth potential of Nvidia with a market value of more than US $2 trillion is as big as the growth space of Ixienaqi. Another 100 billion dollars, familiar? Sun Zhengyi played the "cycle" of pie painting.
As the second phase of the $100 billion Softbank Vision Fund neared its maturity, he drew a $100 billion Ishnaki. "Every five years is a cycle, and every five years is a new cake." So, what role does Ishnaki play in benchmarking Nvidia, which used to follow the pace of Nvidia?
What role? Nature plays the role of "tool" of Sun Zhengyi's retreat. No one used to accept orders, but now shareholders accept orders. It should be said that Sun Zhengyi is also very "shrewd". He sold the ARM equity held by Softbank Vision Fund to Softbank in exchange for the profits of Softbank Vision Fund. On the one hand, he received a commitment of $8.2 billion from Softbank shareholders, and on the other hand, he won the investment opportunity of Softbank Vision Fund LP to create Ixienaqi Capital Disk.
According to WhaleWisdom data, Sun Zhengyi has launched the "escape plan" and recently sold and reduced the shares of the largest e-commerce platform in South Korea, Coupang, the largest online food order demand aggregator in the United States, DoorDash, the largest travel platform in Southeast Asia, Grab Holdings, the largest payment platform in India and other star companies. In the view of an analyst, "Sun Zhengyi's crazy move is characterized by forced flight." Because the above portfolio made the total amount of Softbank Vision Fund disappear by nearly $29 billion. In addition, Sun Zhengyi also reduced his holdings of Shangtang Technology, which advocates AI original technology, by stages. He is trying to get rid of those worthless "old cakes".
With "new cake", ARM is also "old cake", which is a chip to gain trust and funds from all parties. Softbank's 2023 financial year report is somewhat deceptive. Softbank's vision fund made a profit of $822 million, but Softbank lost $1.46 billion. This is also under the operation of Sun Zhengyi's "fight between left and right". The reason why Softbank has continued to lose money and survive these years is that Sun Zhengyi has "painted new cakes one by one" for global LPs.
Miraculously, Sun Zhengyi's personal debt to Softbank was $4.7 billion and his investment failed in recent years. His wealth did not fluctuate as sharply as Softbank's annual losses. The Forbes Rich List shows that in 2022 and 2023, the wealth of Sun Zhengyi will be 21.3 billion dollars and 20.9 billion dollars. The Hurun Global Rich List shows that in 2024, the wealth of Sun Zhengyi will be 24.8 billion dollars. It's really "losing the company and making the boss rich"
