SoftBank’s CFO network helps portfolio companies bridge the gap between private and public offerings, according to Navneet Govil, managing partner and CFO of the SoftBank Vision Fund.
Govil gave his remarks in a keynote interview with Richard Melville, US editorial director of PEI Media, on June 9 at the CFOs & COOs Forum held online.
The network started with its FinConnect Summit in 2019, Govil said. There, CFOs from Vision Fund’s then 90 portfolio companies assembled in person and exchanged ideas and best practices. With new investments, the network has since grown to 150 companies. And, as a result of the pandemic, the conferences are currently being held virtually.
“It’s good for portfolio companies to see how [other CFOs] are pitching their stories”
Softbank Vision Fund
Softbank’s network also helps prepare CFOs to face the demands of the public markets by providing feedback in forums designed as a quasi-roadshows. These IPO summits occur four to five months before planned IPOs. There, potential institutional investors listen to CFO presentations, while other portfolio CFOs observe. IPO readiness is the issue.
“This way, institutions get a heads-up about what’s coming,” Govil said. “It’s good for portfolio companies to see how they are pitching their stories.”
Govil also explained that SoftBank had recently announced a partnership with IonQ in the hope of using quantum computing to make the best use of data produced by the 150 portfolio companies in the CFOs network.
He said robotics can ultimately streamline and make more efficient various financial and accounting procedures. The aim is to speed accounting processes, sharpen forecasts, and ultimately to incorporate predictive possibilities.
Faster processing should allow for deeper insights into trends emerging among portfolio companies. This in turn should make it possible to share information about trends emerging across various sectors.
Govil added that faster handling of information should enable portfolio companies to provide the kind of quarterly guidance that is now demanded of companies going public. The goal is to move financial reporting from being simply descriptive and towards something prescriptive, and finally to forecasting risks and opportunities.
On the changing demands on CFOs, Govil noted that SoftBank focuses on what he called the three Cs: character, capability and collaboration. However, managing rapid change demands agility and the ability to work with “constrained resources” as portfolio companies stretch themselves to grow in a transforming economy.
To retain talent, SoftBank also works to provide mentorship so that employees develop the “soft skills” needed to succeed in any corporate culture. A rotation program provides employees with the ability to transfer within the organization.
SoftBank’s Vision Fund unit manages two vehicles: a $98.6 billion four-year-old fund; and a $30 billion, two-year-old fund. These funds have participated in high-profile IPOs, including Airbnb, Doordash, Uber, WeWork and, most recently, Coupang. The unit posted a profit of $36.9 billion as of March, placing it among the world’s biggest earners.