Troubled tech fund SoftBank wants to back startups in these 3 areas amid Covid; CEO outlines plan

SoftBank has overall backed around 90 companies via the two Vision Funds. (Reuters image)

The world’s biggest startup backer SoftBank, which has been in the spotlight in recent past due to the poor performance and losses of its portfolio companies such as WeWork, Uber, OYO and more, is continuing to actively hunt for startups amid pandemic. However, during the current crisis, there are three main areas that the mega Vision Fund is looking to place bets on. During the virtual Founders Forum conference a few days back, fund’s chief executive Rajeev Misra said that food delivery, digital healthcare and virtual learning are the fast-changing segments where the fund has been “putting dollars to work” in the past few months, CNBC reported. For instance, in food delivery, the fund is willing to back a whole stack of startups and not just only around food delivery. “Not just delivering food but, delivering groceries, cooking the food in (dark) kitchens, is going to change,” he said. SoftBank has already invested in multiple food and grocery delivery firms such as DoorDash, UberEats, Alibaba-owned Ele.me and Grofers.

Adoption of digital healthcare has also caught increased investors’ interest globally as Covid pandemic has forced people to consult doctors on call or over the internet. Telemedicine has certainly been among the biggest beneficiaries of the Covid crisis. SoftBank too is eyeing startups here. Misra said that online consultations and AI-powered personal doctor apps have been surging under lockdowns. Moreover, drug discovery has also been sped up by innovative startups as it takes a long time and involves billions of dollars. SoftBank already has around 10 health tech companies in its portfolio including 10x Genomics, Collective Health, Guardant Health, Roivant, Vir etc.

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Similar to digital healthcare, online education has got a jumpstart due to Covid as educational institutions and students have switched learning to digital channels trying to emulate the physical classroom experience but with customized teaching for every student. “Education is extremely important for society,” Misra said adding that it can help in tackling disparity in wealth. SoftBank has made some investments in virtual learning space as well such as Beijing-based online learning app Zuoyebang in which it reportedly put $750 million funding in June.

SoftBank has been impacted due to disappointing IPOs of Uber and Slack while WeWork’s failed IPO had also hit its reputation badly. In addition, turmoil at Indian startup OYO amid layoffs, the backlash from hotel owners, etc. also raised doubts about the further impact on SoftBank’s performance as a fund. SoftBank had announced plans for its second Vision Fund worth $108 billion. However, its future remains uncertain after the first Vision Fund saw losses worth $18 billion in May. SoftBank has overall backed around 90 companies via the two Vision Funds.