Everything You Need to Know About SoftBank Group in 2021 + Infographic
Back in 1984, a Japanese entrepreneur presented a 300-year plan to make his company the largest in the world. His name was Masayoshi Son, the person behind the international conglomerate and tech giant SoftBank Group. Like the Japanese investor and philanthropist said, the point of SoftBank was to have a growth strategy. Over the next decades, the company established itself as a recognizable brand. Scroll down to learn the most interesting facts and stats about this impressive and groundbreaking corporation.
SoftBank Group History and Timeline
SoftBank was first founded in 1984 by Masayoshi Son, a Japanese entrepreneur. Ten years later, Son made the executive decision to take the company public. SoftBank debuted on the stock market in 1994, with a $3-billion valuation.
A few years later, in 1996, SoftBank made a joint venture with Yahoo!, creating Yahoo! Japan. The tie-up marked a turning point for SoftBank and prompted it to become a holding company. Around the same time, Son launched a US branch, SoftBank America Incorporated.
Moving on to the year 2000, SoftBank made its most successful investment yet. The company bought shares worth $20 million in Alibaba, a Chinese tech-startup at the time. Adding Alibaba to the SoftBank portfolio proved a smart step, with Alibaba’s IPO netting over $60 billion for SoftBank.
The next decade was filled with moves and investments that proved just as successful. SoftBank bought a baseball team in 2005 for $189,364 million. In March of 2006, the group invested around $16,500 billion into Vodafone Japan. A month later, both companies merged into what we now know as SoftBank Mobile Corp. The mobile network subsequently established a partnership with Apple, becoming the only official iPhone carrier in Japan until 2011.
The list of SoftBank Group subsidiaries is unsurprisingly long. SoftBank has invested in various companies, and its corporations operate in different fields. In the latest update on SoftBank corporations, there are over 70 brands. Here are some notable picks that show the diversity of the SoftBank family.
- BB Backbone Corporation – Telecommunication services
- BB Satellite Corporation – Service and business planning for satellite operation
- PayPay Corporation – Electronic payment services
- SB Telecom – Sales support and consulting in the communication business. This brand has subsidiaries in the USA, China, India, Thailand, Singapore, and Vietnam
- Z Holdings Corporation – Business management of operations
- Cinarra Systems Japan – Internet advertising business
- BOLDLY Inc. – Consultation, development, and operation of autonomous driving technology
As you can see, SoftBank is present in numerous countries and industries worldwide. From online advertising and electronic payments to satellite operations and autonomous driving, the company’s portfolio is quite versatile.
SoftBank ISO Certification
The SoftBank portfolio boasts a plethora of ISO certificates. Those act as a seal of approval, verifying that the company in question follows the strict standards by the International Organization for Standardization. Here are all the certificates the company holds at the time of writing:
- Integrated management systems
- Quality management systems
- Environmental management systems
- Information technology – Service management – Part 1
- Information Security Management Systems
- Personal information protection management systems
- ISMS cloud security management systems
SoftBank Group Investments
In its thirty-year-long existence, SoftBank has invested in dozens upon dozens of startups. Thanks to its $100 billion Vision Fund, the company has invested in tech giants like Nvidia and Slack. SoftBank is currently raising a second Vision Fund and has set its value at $108 billion.
However, in recent years, the company has gone through multiple public scandals and massive losses. More specifically, SoftBank lost over $6.5 billion with Lyft, Uber, and WeWork. As a result, other SoftBank-owned startups are suffering significant losses. Below, we created an overview of some recent SoftBank investments alongside its most significant successes and flops.
Most Recent Investments
This company took off in 2015 and focuses on creating and improving the technology behind self-driving cars. SoftBank invested $159 million into this business, which has a total funding of over $174 million. At the time of writing, Nauto was valued at $1 billion.
Founded in 2013, Clutter is a company that provides on-demand storage services and platforms. It raised over $310 million, $200 million of which were invested by SoftBank. The company is currently valued at $600 million.
Established in 2012, Cybereason is a security software provider based in Israel. The company received a total of $150 million in SoftBank capital on two separate occasions. First, in 2015 it received $50 million, and then an additional $100 million two years later. Cybereason’s most recent valuation stands at about $1 billion.
Investment Success Stories
SoftBank expanded so quickly thanks to the trust it got from investors but also due to smart investment strategies. The company poured money into innovative ideas, many of which proved good decisions.
The Alibaba Group is a Chinese tech company specializing in ecommerce, internet, technology, and retail. SoftBank saw the potential behind this rising star and decided to invest $20 million. With this investment, SoftBank became the company’s largest shareholder with 29.4%. To say the investment paid off would be an understatement since SoftBank’s stake is currently valued at $125 billion. In 2019, the Japanese group started selling parts of its share in Alibaba. At the time of writing, SoftBank has let go of over $13.7 billion.
Another one of the better SoftBank investments, Plenty is an indoor vertical farming company, which was founded in 2013. In 2017, SoftBank invested $200 million in Plenty or nearly half of the $401 million in total funding raised. Plenty has been recently valued at an impressive $1.05 billion. Besides SoftBank, Jeff Bezos and Eric Schmidt are among the most famous investors in the idea. In August 2020, Plenty recorded its first collaboration deal with a major retailer. The company will supply 430 Albertsons stores in California with baby kale, baby arugula, mizuna mix, and crispy lettuce.
SoftBank’s ambitious 300-year plan for the future has suffered some miscalculations over the years, too, which have also weighed on the SoftBank stock. Below, let’s go over the investment flops that resulted in multi-million losses for the corporation.
In 2018, SoftBank decided to invest in Uber’s rising star. SoftBank invested $7.6 billion in the hail-riding company purchasing shares at nearly $33 a share and $48.77 per share from existing investors. In September 2019, Uber’s share price dropped to $30.70, placing SoftBank for over $600 million in the red. By September 2020, Uber had seen its stock price recover to over $34. Still, that doesn’t nullify the fact that SoftBank’s public monetization efforts had disappointing results.
WeWork was launched as a revolutionary solution for office space and workspace. The company was valued at $47 billion when SoftBank invested in it in January 2019. Only eight months later, public investors valued the brand at under $25 billion, highlighting SoftBank’s serious misstep. November 2019 reports revealed that SoftBank had logged a $6.5 billion loss thanks to its investment in The WeWork Company.
While SoftBank’s investment in Slack isn’t as bad as the previous two, it still isn’t quite a success story. The corporation invested about $335 million in Slack between 2017 and 2018, buying shares for $8.70 and $11.91 a stock. By September 2019, SoftBank’s investment had reached a worth of slightly over $1 billion. In September 2020, Slack saw its shares trade for about $27. This was good news considering that in March 2020, the price per share dropped under $20. Still, all these values are far from the record-high $37.50 hit in June 2019. Meaning, Slack didn’t provide the returns and growth expected by SoftBank.
SoftBank Group Financial Profile and Growth
Over the past three and a half decades, SoftBank’s finances have experienced extraordinary growth. According to 2019’s annual report, SoftBank generated revenue of $86.514 billion last year. The company further reported an operating income of $20.208 billion. The gross profit meanwhile reached $34.729 billion.
Over the years, SoftBank has been reporting great operating results. The company’s revenue has been on the rise until 2019 when a few flops resulted in dramatically lower returns. In March 2016, SoftBank’s revenue was JPY8.88 trillion, while in 2017, it inched higher to JPY8.90 trillion. The company’s turnover kept growing throughout 2018, as well, with SoftBank reporting revenue of JPY9.15 trillion.
In 2019, the bad SoftBank investments showed their impact on the company’s revenue. That year, the corporation saw revenue of JPY6.09 trillion, or JPY3.06 trillion less compared to 2018’s result. The latest revenue reports from SoftBank, released at the end of March, indicated that recovery was underway.
SoftBank’s gross profit has noted a similar trend. Yet, rather than continuous growth, the gross profits in 2016, 2017, and 2018 moved a bit over JPY3 trillion. The respective gross profit of SoftBank Group for those years was JPY3.36 trillion, JPY3.42 trillion, and JPY3.63 trillion. When the revenue hit a high of JPY9.15 trillion in 2018, the gross profit reflected this.
In 2019 and 2020, in contrast, SoftBank’s gross profit dropped sharply. In March 2019, the corporation reported a gross profit of JPY2.52 trillion. This figure was by JPY1.11 trillion less than the gross profit seen the year before. In March 2020, this segment noted a slight uptick.
SoftBank Group saw its net income significantly improve between 2016 and 2019. The same thing, unfortunately, can’t be said for the fiscal year that ended on March 31st, 2020. This was the first time in years that SoftBank reported a net loss. Let’s see what exactly happened.
In 2016, SoftBank saw a net income of over JPY474 billion. This figure skyrocketed to over JPY1.42 trillion the next year, noting an impressive growth of nearly JPY1 trillion. In 2018, the net income dropped to JPY1.03 trillion only to jump to JPY1.41 trillion again in 2019. The real shock, however, arrived in March 2020 when SoftBank reported a net loss of over JPY961 billion for the financial year, marking the first annual loss in 15 years.
Despite the underperformance noted in the fiscal year that concluded on March 31, 2020, SoftBank’s total assets kept expanding. In 2016, they were valued at JPY20.70 trillion. Their value kept improving over the following four years, too, reaching JPY37.25 trillion.
The total debt of the SoftBank Group has been increasing over the past years too. In 2016, the total debt of the company was JPY11.94 trillion. It hit JPY14.98 trillion, JPY17.04 trillion, and JPY15.68 trillion, respectively, in the next three fiscal years. In March 2020, however, the corporation reported that its total debt had decreased to JPY14.27 trillion. SoftBank also reported long-term debt of JPY9.28 trillion.
SoftBank has also taken care to reward shareholders, starting back in 2002 with a full-year dividend of JPY1.17 per share. A decade later, the group introduced an interim dividend. For the FY2019, the company has announced an interim and a year-end payout to shareholders of JPY22 each, or JPY44 in total. The company has further cheered investors with massive share buybacks. The most recently announced one will see SoftBank return nearly $10 billion to investors by July 2021.
SoftBank Share Price & Market Cap
Despite the turbulent period and investment flops, SoftBank’s shares have noted a steady growth between 2015 and 2020. The shares rounded out September 2020 at JPY6,469 on the Tokyo Stock Exchange. The company also has shares trading as American Depository Receipts, with the price standing at around $30.
As for the market cap of the company, at the end of September 2020, it stood at about $127 billion. This number is, in fact, the highest one compared to the market cap seen in the previous five quarters. The lowest SoftBank market cap these past quarters was recorded in Q1 2020 — $72.48 billion — only to improve in the following months.
If we divide SoftBank into several segments, it’s evident that the company has been expanding even despite the investment flops. For instance, both the consumer and the enterprise segment of the brand improved by 4%. SoftBank’s computer and technology segment generated revenue of $86.63 billion, and its market cap was $88.56 billion.
SoftBank’s Yahoo segment grew by 4%, as well. The PayPay brand noted especially good results. In mid-2019, the service reported 10 million users in Japan, 1 million merchant partners, and over 100 million transactions to date.
13+ Surprising SoftBank Group Facts and Stats
It comes as no surprise that a company such as SoftBank has many interesting facts and stats associated with it. Below, we listed some impressive and surprising details about the Japanese giant.
- SoftBank’s distribution rights of iPhone 4S increased the company’s market share from 16% to 23%.
- SoftBank owns a plethora of assets, including a stake in Alibaba Group Holding and Japan’s baseball champions.
- In 2014, SoftBank and Aldebaran Robotics co-designed the humanoid robot Pepper.
- SoftBank employees receive a baby bonus, ranging between $400 for first-born children and $40,000 for a fifth child.
- In 2019, SoftBank’s brand value reached $19.3 billion.
- The company poured $300 million of SoftBank capital in the dog-walking startup only to give up on it in 2019.
- In 2018, SoftBank sold over 11.1 million mobile devices, and about 5.3 million of those were to new subscribers.
- In 2019, SoftBank was recognized by the ‘PRIDE Index’ as an LGBT-friendly workplace.
- SoftBank’s plans for growth include focusing on the potential of AI, creating a cluster of leading companies, and not holding majority stakes.
- SoftBank will move its headquarters to Takeshiba Smart City, a seaside commercial and residential district in Tokyo.
- SoftBank and Toyota created a Joint Venture — MONET — that aims to launch on-demand autonomous, electric, and customizable vehicles.
- About 48.5% of SoftBank’s net sales are in Japan. An additional 43.8% are on the US market, while ‘other markets’ contribute with the remaining 7.7%.
- In June 2020, about one month after the Sprint and T-Mobile merger, SoftBank announced the sale of its $20 billion stake in T-Mobile.
SoftBank Group in Numbers
While the entire timeline of SoftBank is impressive by itself, some numbers provide deeper insights. The company employs thousands of people and operates in multiple countries. It’s also a true innovator with tens of registered patents and trademarks.
- Employees – In 2018, SoftBank had 76,866 employees. In 2020, the consolidated report showed only 37,821 employees.
- Funds – In 2017, Vision Fund raised $100 billion. In 2019, the Vision Fund II was announced and expected to raise $108 billion. Due to the coronavirus crisis and investment flops, however, this may never become reality.
- Patents – SoftBank has 44 registered patents. Most of those are in the ‘Electric Communication Technique’ category.
- Trademarks – SoftBank has 30 registered trademarks. Most of them are in the ‘Scientific and Electric Apparatus and Instruments’ class.
- Customer satisfaction – SoftBank boasts high customer satisfaction levels across its subsidiaries. SoftBank’s consumer satisfaction is 96%. Y!mobile and Line Mobile recorded customer satisfaction levels of 94% each.
- Deals – In the past two years, SoftBank Group has made over 100 deals worth nearly $56 billion.
- Subscribers – SoftBank has nearly 34 million wireless subscribers in Japan and about 25 million subscriptions in the Kanto Koshinetsu region. This is the region that includes the Greater Tokyo Area and seven prefectures. In 2019, there were 7.76 million broadband subscribers in Japan.
- Group companies – In 2020, there were a total of 263 companies in the SoftBank family.
Traffic by Country
SoftBank is an international company and present in various countries. Still, most of its traffic comes from Japan. Over 95% or, more precisely, 96.31% of the corporation’s traffic happens in Japan. China is the only country where SoftBank traffic is over 1% or 1.07%. Finally, SoftBank’s traffic from the USA, Taiwan, and Vietnam is 0.76%, 0.25%, and 0.17%, respectively.
Despite several flops and an overly ambitious 300-year growth plan, SoftBank Group surely deserves praise. The company has been making lots of bold investment moves and, most of them turned out to be true success stories. More importantly, SoftBank doesn’t seem to consider slowing down, despite 2019’s bad financials. So, this is a brand we will keep our eyes on in the future. While SoftBank may not become the largest company in the world, it surely affects the global economy and tech innovation.