The previous blog explained how Softbank is expanding by buying other technology and telecommunications companies in a strategic manner. Mukesh Valabhji endeavours to keep followers informed of the latest business news via his Pinterest page, follow Mukesh to read more.
GungHo Online Entertainment is a Japanese video gaming corporation which hosts the Japanese server of Ragnarok Online. It has also developed Ragnarok DS for the Nintendo DS. Its mobile game Puzzle & Dragons was extremely successful; in 2013, the company made $1.6 billion in revenue, of which 91% was attributed to this game. Since its launch, the game has been downloaded 37 million times.
GungHo’s specialisms are the planning, development and distribution of online computer games, applications for use on smartphones and console games.
Softbank already had a stake of 33.6% in GungHo; it bought another $265 million of stock which increased its stake to 58.5%, making GungHo a subsidiary company. As part of the deal, Softbank also acquired 73,400 shares in Asian Groove.
Softbank and Gungho have previously acted collaboratively; in 2013, they jointly bought a 51% stake in Finnish computer gaming company Supercell in a deal costing them $1.53 billion.
Softbank has set itself the target of becoming the number one mobile network provider in Japan, and wants to reach 1 trillion yen in annual operating profit by March 2017. The acquisition of GungHo is a strategic step towards this goal.
The previous blog post took a look at Softbank, the multimedia Japanese conglomerate, and how its profits had been affected by its acquisition of Sprint Corp. However, there are many strands to Softbank’s financial position.
By the end of the 2014 financial year, it is expected that Softbank will have generated an operating profit of 950 billion yen. This is ahead of the target of 900 billion which was set 6 months previously.
Softbank Mobile performed very strongly, acquiring more smartphone customers and Finnish gaming company Supercell boosted profits further. The original target for Softbank was 1 trillion yen, but this was downgraded to 900 million yen due to the drag caused by Sprint Corp.
The conglomerate has further plans for expansion; in June 2015 it announced that it was investing $1 billion in the Korean company Coupang which specialises in e-commerce. Coupang is broadly speaking the Amazon of Korea. Valued at $5 billion, the company now joins a few elite with valuations of over $1 billion.
Coupang has achieved great market penetration; Korea has a population of 50 million, and its apps have been downloaded 25 million times. Mobile accounts are 75% of its revenue and 85% of total traffic to the service. The company has a logistics network which it set up itself as well as customer fulfilment centres, and its own fleet of delivery drivers. At first, Coupang used third parties for deliveries but then it began to replace them with its own employees to build brand awareness and to connect better with its customers.
It has offered same-day delivery for almost two years, and has set new standards for e-commerce throughout the world. Softbank thinks globally, but for the time being it is very strongly focussed on Korea.
Mukesh Valabhji’s final post in this series looks at Softbank’s investment in another company GungHo Entertainment.
Softbank, the Japanese multinational conglomerate specialising in telecommunications and the internet, recently announced that its first quarter profits for 2015 had nearly tripled from the year before. It also restated its commitment to turn around the US mobile operator Sprint Corp, which has been struggling lately.
Chief Executive and founder Masayoshi Son announced a net profit of $1.71 billion, equivalent to around 214 billion yen. Net profit for the year before was around 78 billion yen. This beat the estimated profit of 135 billion yen.
Softbank acquired Sprint Corp in 2013 for $22.2 billion, and the original plan was to merge it with US firm T Mobile. However, the regulator opposed this idea, so instead the company was run as a going concern, but has experienced difficult trading conditions.
Mr Son explained that Sprint Corp is slowly but steadily being turned around and that he now has no intention of selling it because he believed that it can become a very good and profitable company. It has experienced an upswing in the number of post-paid customers (those who have a mobile phone contract and who are billed in arrears each month according to their phone usage) as well as lower churn and improved customer quality. He believes that the key to the company’s future is dramatically cutting its operating costs.
Mr Son also announced that Softbank would be carrying out a share repurchase as he felt that misconceptions about Sprint Corp had led to Softbank being undervalued. Softbank would repurchase up to 20 million shares at a cost of up to 120 billion yen.
As well as wanting to re-energise Sprint Corp, Mr Son is showing increased interest in the internet side of the business. SoftBank President Nikesh Arora stated that the company was committed to seeking out the next generation of entrepreneurs.
Bookmark this page to read the next blog post in the series, exploring Softbank’s financial status in more detail.
This series’ previous posts have explained how cloud computing works and discussed the various advantages conferred by this technology. The cloud came into existence in the late 1990s, and since then the numbers of businesses adopting it has steadily increased. Board member of Softbank PrinceVille, Mukesh Valabhji, has been watching with great interest just how Softbank used the cloud as an engine for growth.
The use of cloud computing is growing all the time and it is estimated that in 2016, the growth will increase to the point that it will form the bulk of new IT spending. It is also thought that by the end of 2017, over half of large organisations will have some sort of hybrid cloud development.
A recent survey of IT professionals discovered that there had been an increase of 74% in the use of hybrid cloud technology from the year before. Just over half of respondents said that while the greater part of their application portfolios were not yet in the cloud, they were at least cloud-compatible. 32% run more than a fifth of their applications in the cloud.
Cloud adoption is growing, and if companies are not to be left behind, they need to make it a strategic objective rather than a shadow IT project.
The previous blog post covered a keynote speech from Mr Miyachi of Softbank Mobile, in which he outlined how technology companies can use the cloud to stay ahead of the competition. This post will expand upon some of the issues and ideas raised by Mr Miyachi – particularly in relation to effectively utilising cloud computing.
Cloud computing means storing and accessing data over the internet instead of it being saved on a computer’s hard drive. A cloud app allows users to open a browser, log in and start working – for example, sales people working in the field have access to all client documents, which can be kept up to date in real time so that those back at the office are aware of all developments as they happen.
The cloud has caused a step change in the business environment; millions of organisations worldwide depend on the cloud to back up their systems as well as to create and manage documentation and their client relationship management systems. Research has found that companies with over 25,000 employees use an average of 454 cloud based applications.
There are many benefits for businesses to obtain through using the cloud. Ordinarily, new applications can take months or even years to implement; the cloud can cut through the traditional complexities, allowing new applications to be accessed instantly and be in full use in a matter of days.
There is also no need for an upfront investment in new equipment, software licenses or consultants’ fees; the use of cloud-based software means that these costs can virtually be eliminated. The only cost is usually a monthly subscription. The applications are instantly scalable – the business pays for as few or as many licenses as they need at any one time.
Cloud based applications are maintenance-free as well, because the provider of the cloud maintains them invisibly behind the scenes, and they have the advantage of being very secure. A lost laptop is no longer a disaster as no data is actually stored on it.
Don’t miss the next blog post on the Mukesh Valabhji blog, which examines the uptake of cloud-based services by businesses worldwide.
Softbank is a Japanese multinational conglomerate which operates in a number of industries, specialising in telecommunications and the internet. It is now the 62nd largest company in the world. At a recent keynote speech, Chief Executive Officer and Mobile President Ken Miyauchi gave his thoughts on the challenges faced by companies trying to stay ahead of their competitors, in an industry of ever-increasingly rapid change. Mukesh Valabhji, board member of Softbank PrinceVille Investments, was interested to hear Mr Miyauchi’s plans for Softbank’s progression.
Mr Miyauchi explained that as Softbank acquired companies, its customer bases and the corresponding traffic, have increased sharply. The company has enabled this growth and also grown more efficient at data management, largely through its use of virtualisation. Softbank has spent the last 15 years acquiring companies, resulting in an accumulation of 1,200 different systems, but by making use of virtualisation, these have been reduced to a more manageable 360.
Softbank Mobile also relocated its data onto Oracle’s Exadata data warehouse which allowed it to cope with a tripling of customer numbers (from 15 million to 45 million), as well as being able to manage its customers’ changing needs in real time.
A constant challenge for a company such as Softbank Mobile is to respond to development needs in an agile manner. In today’s environment, a lead time of three to six months is simply not fast enough. By using a cloud platform, the company has been able to obtain the resources to stay ahead of the competition by developing new systems very quickly, and it has actually been able to decrease the amount of time it takes to change and refresh their systems.
Mr Miyauchi’s final point was that companies need to stay abreast of the Internet of Things, gleaning information from it and being able to interpret it. The Internet of Things is the network of physical objects which contain electronics, sensors, and network connectivity, so that they can collect and exchange data.
Previous blog posts have discussed how Banjo, a company which collates news from around the world via social media, obtained $100 million of funding from Japanese giant Softbank. Now the latest developments at Banjo are explored in more detail; this video article from entrepreneur and investor Mukesh Valabhji explains what is next for this innovative company.
Banjo was originally intended to help people to keep up with their friends’ activities; when its founder Damien Patton realised that there was no room for further growth in this area, he repurposed his company so that it collected and collated information from social media, allowing users of its technology to experience news and live events from around the world in real time.
Having secured the investment from Softbank, Banjo announced that it intends to spend the money on hiring more data scientists and also engineers. Its new creation, which has been called ‘crystal ball’, will be a powerful tool for news organisations such as the American NBC and the UK’s BBC. It will be able to alert journalists to breaking news, giving them access to rich content such as eye witness sources. It will also enable journalists to carry out research into ongoing investigations and report on events in real time as they are actually unfolding.
Banjo is redeveloping and enhancing its user interface, giving additional functionality. The ‘Banjo Discovery’ application gives journalists the resource of on the ground content, for instantaneous context. In the very time pressurised environment of news reporting, Banjo could give the crucial head start to get on the air ahead of competitors by using its published content.
The company has issued a press release stating that access to its crystal ball will be free of charge. Those using it will also have the benefit of its Trending Events dashboard, giving an easy way to stay ahead of the curve. Banjo’s success demonstrates how a company started by one person can become a global commercial success.
The previous blog in the series explained how Softbank had invested $100 million in a series C financing round to allow Banjo to expand its offering. Banjo analyses breaking news and events in real time, and is already used by prime news organisations such as NBC, the BBC and Fox to deliver live social content to their television networks. In this article, the investment mechanism will be examined in more detail.
Softbank is a Japanese telecommunications and media giant, making the investment in Banjo a good fit with its business model. Previously, Banjo has secured a $5 million series A investment in 2010, followed by a $16 million series B. A series A round is associated with a company’s first attempt at attracting venture capital investment, and the name itself refers to the class of stock which is being offered for sale at this juncture.
Series A preferred stock is offered during the seed or early stage round, which is usually carried out during the critical stage in a new company’s funding. Series B is the second round of financing which usually takes place once the company has reached certain landmarks in its development. As the company is more advanced by this stage, the series B investor will pay more than the series A. The series C round occurs when the company is looking to expand further, having already proved its success in the market and being able to demonstrate that it has the potential to reach a larger market.
The C and D rounds of financing conclude the early financing cycle, and at this point a venture capitalist may be looking to exit. It is usual for companies to be sold on or made publicly available once the early funding cycle has been completed.
The next and final Mukesh Valabhji blog post in this series reveals what the future holds for Banjo now that it has its funding in place.
Banjo was founded in 2011 by Damien Patton, and is sometimes called ‘the live internet’ as it lets those who are using this app experience unfolding events in real time. They can watch breaking news as well as live events through the eyes of people who are actually there. It works by collating content from social media such as Google Plus, EyeEm, Twitter, Instagram and Facebook as well as many more, collating all geo-tagged, publicly available content and indexing it by location, content and time.
It was initially intended to help app users to keep up with their friends, and in 6 months was being used by half a million people. By 2014, and following successive software upgrades, it had 6 million users.
In May 2015, Banjo announced that it had successfully obtained funding of $100 million from Softbank, located in Japan. Softbank was established in 1981, has its headquarters in Tokyo and is now the 62nd largest organisation in the world.
Banjo needed investment to realise its ambition of creating a ‘crystal ball’ – a way of seeing everything that is trending across the whole planet in real time. It is hoping to harness the enormous power of social media by imposing order and structure on the vast banks of accumulating information.
The company has created a framework which divides the earth into 35 billion grid squares; each time something is shared publicly on social media which has been tagged with a location, it is classified and analysed. It plans to become the world’s leading real-time data platform, pushing far beyond existing boundaries.
The next blog post in this series from Mukesh Valabhji will examine Softbank’s investment strategy in more detail.
Japanese internet and telecommunications giant SoftBank recently enlisted the skills of renowned master samurai Isao Machii to demonstrate the speed of their new mobile service Platinum Band LTE. Machii, known as The Modern Samurai throughout Japan, demonstrates his own super-human skills with the Katana sword by slicing through several objects travelling at high speeds – an orange fired at a speed of 80km/hour which he slices neatly in half, a fried prawn fired through a tube at 130km/hour and then a glowing red ball travelling at 150kn/hour, with the video necessarily slowed down so viewers can see what is happening. Board member of SoftBank’s PrinceVille Investments fund Mukesh Valabhji is one of many individuals highly impressed by the latest marketing campaign from SoftBank and the almost supernatural abilities of Isao Machii.
The entrepreneurial Mukesh Valabhji has numerous business interests across the world and serves and has served in prominent positions on a variety of Boards throughout his career. These currently include his role on the SoftBank PrinceVille Investment board and Crimson Investments. His position with SoftBank has led Mukesh Valabhji towards further investment in start-up technology companies. These investments sit alongside his numerous property investments as founder and Chairman of Capital Management Group across commercial buildings, retail malls, hotels and resorts in a number of prime geographical locations, including the financial district of Singapore and Dubai as well as his native Seychelles, where how owns both the Capital City Building and the Intelvision Building, from where his Intelvision telecommunications, broadband and cable television operates.
Isao Machii, Modern Samurai
As such a well-known Japanese company it made sense for SoftBank to partner with an iconic Japanese figure such as Isao Machii for their Platinum Band LTE campaign. Isao Machii is one of the most renowned masters of the Iaijutsu sword style in Japan and the inventor of the Shushin-ryu Iaijutsu style. He teaches at the Kawanashi, Hyogo training venue Shushin-kan Iaido and to date holds no less than five Guinness World Records. These are: Fastest 1,000 Iaido Martial Arts Sword Cuts; Most Martial Arts Sword Cuts to One Mat; Most Sword Cuts in Three Minutes to Straw Mats (252); Fastest Tennis Ball Cut by Sword and; Fastest BB Pellet Cut by Sword. In a video which the pellet can only be seen properly when played in slow motion, Machii halves a BB gun pellet travelling at a speed of over 200km/hour! Dedicating his entire life to his craft, Machii demonstrates abilities which are beyond belief. Dr Ramani Durvasula witnessed the BB pellet decapitation and stated that this level of skill comes from processing things at a whole different sensory level. In the slowed down versions of Machii’s videos it can be seen that at the point of contact his eyes are clearly shut – Machii states that his extraordinary talent lies in being able not to watch the missile but to visualise the trajectory of the object depending on speed and environment and calculate where the object will be as it reaches his sword arc. Action happens faster than the average human can blink, hence the necessity of slowing videos down so watchers can observe what is happening. Japanese viewers may already recognise Isao Machii from other commercial roles demonstrating his impressive striking abilities including his portrayal as the ‘Fruit Ninja’ for last year’s Pillsbury Toaster Strudel advertisement.
SoftBank Capital PrinceVille Investment Fund
SoftBank PrinceVille Investments, of which Mukesh Valabhji serves as a board member, closed a US$250 million fund in 2013. This fund is to assist growth-stage technology companies introduce their brands and products to the fast-growing Asian market, along with expert advice and support from the existing SoftBank network of technology companies in the region. The mature mobile market in Asia along with millions of potential new customers experiencing a rise in disposable income makes the Asian market particularly appealing for start-ups and growth-stage technology businesses. Without local knowledge and funding, however, it can prove difficult for overseas-based companies to crack the market, which is where the SoftBank Capital PrinceVille fund comes in. With backers including Yahoo Japan, Alibaba Group and MediaTek Inc., the beneficiaries of the Fund are provided with both the financial and organisational backing to support entrance into the market and rapid early growth.