Nearly 90% of U.S. and UK tech firms have plans to expand overseas, and Asia is among the top regions for firms seeking to grow revenue and access premier talent. While many Asian countries offer unique global expansion opportunities, some companies eyeing Asia also consider and attempt to attract outside funding to fuel their global expansion efforts.
Currently, no other business is more synonymous with venture capital investments than Japanese multinational conglomerate holding company SoftBank. Its venture capital fund (the SoftBank Vision Fund) has invested more in startups and growing companies than any other firm in history. While SoftBank has shown its enthusiasm for investment by backing more than 180 companies, it is not a guaranteed path to success—and companies looking for outside funding should consider the pros and cons before pursuing investors.
The SoftBank Vision Fund and Global Expansion
The SoftBank Vision Fund is a US$100 billion fund that officially stands as the largest technology fund in history. There are many notable names among its family of firms, including industry giants like Apple, the Saudi Sovereign Wealth Fund, the Abu Dhabi national Wealth Fund, Foxconn, and Qualcomm.
Many SoftBank-backed companies are located throughout Asia, including Grab, Tokopedia, OYO, Klook, Flipkart, Didi Chuxing, Ola, and Alibaba—one of Amazon’s largest competitors. SoftBank has made significant investments in the United States, too; many of these firms have operations in Asia, including Uber, Flexport, Slack, OneWeb, Mapbox, and Nvidia. Uber, Slack, and WeWork are a few of the companies in the Softbank portfolio have gone or plan to go public, thanks to a massive injection of funding.
Learning from SoftBank: Key Takeaways for Firms Considering Global Expansion and Venture Funding
One of the key things to understand about SoftBank is that it must see a return in public capital markets. This means that the global growth of some of its companies is a large part of what is driving the current IPO market. However, the significant setbacks faced by WeWork since filing its IPO may give some decision-makers pause when attempting to attract SoftBank’s (or other investors’) attention.
Yet despite setbacks and scrutiny, SoftBank is perhaps the biggest example (both literally and figuratively) of how Asian companies are now actively competing at scale with Silicon Valley.
Companies that wish to follow in the footsteps of SoftBank- or investor-funded firms should consider how accepting funding from these outside sources may impact their organization. Companies must be aware of global investors with visions and goals that properly align (or do not align) with their own. These same companies must also be aware of global competition, too—which grows fiercer as more companies establish themselves in international markets.
Take on International Markets with an Experienced Expansion Partner
Expanding into any Asian market requires significant preparation—and not just identifying markets or potential investors. Once the market has been determined, companies must consider other factors that are essential to a successful expansion, including cultural nuances and ensuring top talent is hired and correctly classified.
The latter is one of the many reasons (among others that include global talent acquisition and consulting) organizations choose to partner an International Professional Employer Organization (PEO) like Velocity Global. We leverage our experience, expertise, and global expansion capabilities in more than 185 countries to ensure all aspects of your global expansion are complaint with local requirements—no matter where your expansion takes you.
If you’d like to learn more about global expansion opportunities in Asia, or if you’d like to discuss how International PEO can have you in new markets in as few as 48 hours, contact Velocity Global today.