You don’t end up in charge of a multibillion-dollar venture fund filled with some of the world’s hottest young companies without thinking multiple steps ahead.
Just ask Rajeev Misra, the CEO of SoftBank Investment Advisers. He has modeled out his version of the future and deployed his firm’s capital accordingly. It currently makes up the $100 billion Vision Fund, the biggest venture fund in existence.
A quick peak inside Misra’s Vision Fund portfolio is a veritable who’s who of startup royalty. It includes WeWork, Uber, DoorDash, and Slack among the crown jewels. Once a company is brought into the fold at SoftBank, the mandate is straightforward enough: If you grow enough, you’ll get more money.
At the recent Milken Institute Global Conference, Misra spoke about what he looked for in the roughly 80 companies featured in the Vision Fund at a given time.
At the core of it, Misra likes so-called platform businesses that can use money to invest in technology and achieve greater scale. There’s also the added element of how target companies might work in tandem with existing portfolio holdings. Those types of synergies can make individual firms even stronger.
But that was just part of Misra’s interview at Milken. As a final question, the interviewer — none other than Michael Milken himself — asked the Vision Fund CEO where he saw the world in 10 years.
The response offered an incredible look into how Misra sees the world morphing over the coming decade. It also provides crucial context around some of the investments already present in the portfolio — ones that were clearly made with these paradigm-altering forecasts in mind.
“The disruptors will be disrupted in the next five or 10 years,” Misra said. “I believe that a lot of what we take for granted today — like the smartphone, which didn’t exist 12 years ago — will change dramatically.”
He continued: “That relates to retail outlets, hotels, mobility, the way we consume food at restaurants.”
Here are the major themes he’s watching:
Mobility
“I believe mobility will change dramatically,” Misra said. “By 2022 or 2023 I believe there will be thousands of autonomous vehicles in the streets of major cities in the West. We are investors in GM Cruise.”
And self-driving cars are just part of the equation for the Vision Fund. It’s also invested in companies seeking to use artificial intelligence and other technology to make driving safer (Nauto, Cambridge Mobile Telematics). Not to mention a smattering of global car-rental and auto-retail firms.
Ownership
Speaking of car-rental companies, Misra also delivered a prediction relating to ownership of goods and products.
“I believe ownership of products will be very different,” he said. “Co-living is going to go up. Cities will change. You won’t need as much real estate for parking or retail shops. People won’t buy a second or third car. The entire auto industry will change.”
New synergies between businesses
As mentioned previously, Misra is interested not only in great standalone businesses but also in those that can unlock new value when viewed in tandem with existing portfolio companies.
He provided a prime example in the form of two current holdings: ParkJockey and DoorDash. When viewed alongside SoftBank’s efforts with electric cars, it all suddenly makes a lot of sense.
“ParkJockey owns 6,000 parking lots,” Misra said. “We converted about 20% of those lots to electric-car-charging docks.”
He continued: “They each have heat maps from DoorDash with demand from every ZIP code, so we know what people want to eat in that neighborhood.”
Increased power to consumers and suppliers
“Power is being democratized, and it’s heading toward the consumer,” Misra said. “The consumer will get cheaper goods and services with better quality. All the inefficiencies that they wipe out will keep inflation at bay, as we’ve seen the last couple years.”
He added: “It will also give some power to the suppliers, and take away inefficiencies between suppliers and consumers. It will take out some of the middlemen.”
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