Softbank closes $600 million VC fund
And we reprise our ZD 'debt-bloated carcass' quote
That most curious Japanese company, Softbank, has capped SBTV V, its spanking new Net VC fund at $600 million. This is nearly twice as much as SBTV IV, the previous fund, which invested in 40 or so Net companies. Softbank is a computer distributor-cum VC which owns ZiffDavis; which, until this week, owned DRAM company Kingston Technology; and which still owns slugs of E*Trade and Yahoo!. ZD should be a hugely valuable Net stock, once it gets the hang of making profits. In its current state, the company is described by one analyst as a "debt-bloated carcass". The Register likes this quote. A lot. ZD generates a lot of revenues. But boy, does it know how to lose money, too. Look at ZD UK, for example. It lost a jaw-dropping £24 million in 1997. Word from rival publishers is that ZD UK was in the red to the tune of £27 million in 1998. But boy, does it know how to throw a party for its advertisers. So far as the share price is concerned, investors are pinning the blame on ZD's print history. Last month, Softbank announced its intention to divest ZD's paper interests. This should earn a decent short-term return for Softbank, while maintaining -- or increasing the value of its investment in a slimmed-down ZD(Net). Softbank's 1995 Kingston purchase -- weird at the time -- misfired disastrously. This month, Kingston's founders bought back Softbank's 80 per cent share in the company for $450 million, around a third of what they eventually sold it for. (The initial £1.8 billion headline price was chiselled down to around $1.2 billion following a memory price fall which turned, after the deal was completed, into a lot of a slump). So what about Yahoo! and E*Trade. Some people have expressed concern with revenue deals between with ZD and Yahoo! (Check the debt-bloated carcass link above, if you're interested). But by most people's books these investments have been unadulterated successes for Softbank. ® See also: Daily Net finance news from The Register
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