Saudi Arabia and the Japanese telecommunications and technology group SoftBank are teaming up to launch a huge investment fund.
Over the next five years they plan to get together with other investors and spend as much as $100 billion (90 billion euros) underwriting mostly start-up companies.
The idea is to find and back the cutting edge innovations that will dominate in an increasingly tech dependent world.
“Over the next decade, the SoftBank Vision Fund will be the biggest investor in the technology sector,” SoftBank Chairman Masayoshi Son said in a statement.
“Son is very good at looking for companies with big growth prospects, and that will create fierce competition,” said Hiroyuki Kuroda, secretary general of the Venture Enterprise Center in Japan.
Saudi Arabia’s economy is suffering because of low oil prices, so it is deploying its enormous financial reserves towards non-oil industries.
In a surprise move it put $3.5 billion (3.17 billion euros) into US ride-hailing firm Uber earlier this year, moving away from its traditional strategy of low-risk investments.
Saudi Arabia’s top sovereign wealth fund, the Public Investment Fund (PIF), will be the lead investment partner and may invest up to $45 billion (40.86 billion euros) over the next five years.
SoftBank – a diverse company with stakes from US telecoms firm Sprint to e-commerce giant Alibaba – expects to invest at least $25 billion (22.7 billion euros).
SoftBank is shifting towards cutting edge tech investments but is still wrestling with a $112 billion (102 billion euro) debt pile and the turnaround of Sprint.
Analysis: SoftBank may need to shed more assets to fill its new $100 billion tech fund, writes
jackycwong</a> <a href="https://t.co/bquGnXqI4I">https://t.co/bquGnXqI4I</a> 🔓</p>— Wall Street Journal (WSJ) October 14, 2016
Could this mean a new windfall for start ups? https://t.co/EaUSakPQis— CNNMoney (@CNNMoney) October 14, 2016