- SoftBank has held talks to investment $150 million in home health-care start-up Honor, sources say.
- The deal hasn't been approved by the Vision Fund investment committee and could still fall apart, sources say.
- The investment marks one of the first known potential investments for Vision Fund 2, which is still in fundraising mode and may raise up to $108 billion.
SoftBank's Vision Fund 2 has held talks to invest about $150 million in home health-care company Honor, according to people familiar with the matter.
While the Honor investment hasn't been approved by the Vision Fund's investment committee yet, it marks one of the first known potential bets for the massive new fund. There are several Vision Fund 2 investments in the works, including some that have already been approved by the investment committee, said two of the people, who asked not to be named because the discussions are private. None of the investments will be publicly disclosed until the fund concludes its fundraising, the people said.
SoftBank founder and CEO Masayoshi Son has told Vision Fund partners scouting deals that he wants to slow the pace of new investments and focus on companies that have a clearer path to profitability for his second Vision Fund. The change was precipitated by the public market's negative reaction to money-losing investments from the first Vision Fund, including Uber and WeWork, the latter of which SoftBank has now acquired to stave off potential bankruptcy. SoftBank reported its first quarterly loss in 14 years last month, a result of an $8.9 billion quarterly loss at the Vision Fund.
SoftBank said in July it planned to raise $108 billion for Vision Fund 2 with investments from companies and sovereign wealth funds including Apple, Foxconn, Microsoft, National Investment Corporation of National Bank of Kazakhstan, and major participants from Taiwan. Not all of the stated contributors are still planning on investing in Vision Fund 2, according to a person familiar with the matter, but SoftBank is still focused on raising about $100 billion or more for the fund, the person said.
"Fundraising is progressing as expected as investors assess potential commitments to Vision Fund 2," said a Vision Fund spokesperson, who declined to comment on the Honor acquisition specifically.
Other investors in Vision Fund 2 are likely to include Abu Dhabi state fund Mubadala and Saudi Arabia's Public Investment Fund, though neither is expected to contribute as much as they did to SoftBank's first Vision Fund, the person said. Mubadala committed $15 billion and Saudi's PIF committed $45 billion to Vision Fund 1. SoftBank is expected to be the largest equity investor in Vision Fund 2, just as it was in Vision Fund 1, the person said.
"Vision Fund 2 is going to be launched as scheduled," Son said last month.
SoftBank's first Vision Fund, which raised $100 billion, is no longer committing capital to new deals and plans to use its remaining funds for follow-on investments, people familiar with the matter told CNBC in October.
Honor connects in-home caregivers, seniors and their families via online tools. Founder Seth Sternberg moved into the health space after selling Meebo, a messaging service he co-founded, to Google for a reported $100 million in 2012.
The home care space has received a wave of financing from investors looking to capitalize on an industry that hasn't seen major upgrades in technology. Some companies have stumbled, including HomeHero, which announced a pivot to its business in a blog post titled "There's no magic in venture backed homecare."
Honor has already raised more than $100 million in capital and has more than 600 employees, according to LinkedIn. The company focuses on partnerships with existing, independently owned home care providers, including taking on more of their technical operations, such as caregiver onboarding and training tools.
An Honor spokesperson declined to comment.