Lloyd Price
- Jul 17, 2023

Softbank gearing up for a major new HealthTech investment drive?

Exec Summary:

SoftBank has been investing in healthtech for several years, and there are signs that the company is about to make a big new play in the sector. In 2022, SoftBank Vision Fund 2 invested $1 billion in Alto Pharmacy, a digital pharmacy that delivers prescription drugs to patients. The company also invested $500 million in Ro Health, a telehealth company that provides primary care services to patients nationwide.

These investments suggest that SoftBank is bullish on the future of healthtech. The company is likely to continue investing in this sector, and it is possible that SoftBank will make some major acquisitions and investments in the coming years.

Here are some of the reasons why SoftBank is likely to make a big new play into healthtech:

The healthcare industry is ripe for disruption. The healthcare industry is slow to adopt new technologies, but there is a growing demand for innovation. SoftBank is well-positioned to capitalize on this demand by investing in companies that are using technology to improve the delivery of healthcare.
The healthtech market is growing rapidly. The global healthtech market is expected to grow from $350 billion in 2020 to $850 billion by 2025. This growth is being driven by a number of factors, including the aging population, the rise of chronic diseases, and the increasing use of technology in healthcare.
SoftBank has a track record of success in healthtech. SoftBank has already invested in a number of successful healthtech companies, including Livongo Health and Omada Health. This track record of success gives SoftBank the credibility it needs to attract other investors to the healthtech sector.

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Softbank's growing interest in AI and Generative AI

Pitchbook recently quoted Softbank Chief Masayoshi Son as "ready to shift to 'offense mode' after being on the defensive" and that "after a period of refraining from making new investments the technology group is ready to make a big push into artificial intelligence."

"Son said that the group didn't have spare cash three years ago, but after selling the majority of its shares in Alibaba, SoftBank has accumulated 5 trillion yen (about $35 billion)."

"Additional capital could also soon come from an IPO of Arm, the UK chipmaker that SoftBank purchased in 2016 for $31 billion. Arm is in talks with Intel to anchor its upcoming IPO, and is reportedly preparing to debut in New York as early as September. Arm could raise $10 billion in the listing, Bloomberg reported."

"While Son has long positioned SoftBank as a firm that seeks to capitalize on the AI revolution, the group didn't invest in any leading generative AI companies, including OpenAI."

Source: https://pitchbook.com/news/articles/softbank-masayoshi-son-generative-ai-arm-chips

Therefore one possibility is Softbank unveiling a number of both generative AI and AI investments in Healthtech in the next 12 months, for example:

Virtual assistants: Virtual assistants like Apple's Siri and Amazon's Alexa can be used to answer medical questions, provide reminders for medications, and even book appointments.
Machine learning: Machine learning algorithms can be used to analyze medical data to identify patterns and trends. This can help doctors to make better diagnoses and develop more effective treatments.
Robotics: Robots are being used in surgery, rehabilitation, and other healthcare settings. Robots can perform tasks that are too difficult or dangerous for humans, and they can also provide companionship and support to patients.
Virtual reality: Virtual reality is being used to train surgeons, provide pain relief, and even treat phobias. VR can create realistic simulations of medical procedures, which can help surgeons to practice their skills without putting patients at risk.
Gene editing: Gene editing technologies like CRISPR are being used to develop new treatments for diseases. Gene editing can be used to correct genetic defects, and it can also be used to create new drugs and vaccines.

Source: https://group.softbank/system/files/pdf/ir/presentations/2022/earnings-presentation_q4fy2022_01_en.pdf

Softbank's strategy for healthcare SoftBank's strategy for healthcare is to invest in companies that are using technology to improve the delivery of healthcare. The company is focused on three key areas:

Digital health: SoftBank invests in companies that are developing new digital tools for diagnosis, treatment, and patient engagement. This includes companies that are using artificial intelligence, machine learning, and other technologies to improve the way healthcare is delivered.
Life sciences: SoftBank invests in companies that are developing new drugs, devices, and diagnostics. This includes companies that are using gene editing, stem cell therapy, and other cutting-edge technologies to develop new treatments for diseases.
Healthcare infrastructure: SoftBank invests in companies that are developing new infrastructure for the healthcare industry. This includes companies that are developing new payment models, data analytics platforms, and other technologies that are transforming the way healthcare is delivered.

SoftBank's investment strategy in healthcare is ambitious, but it has the potential to transform the way healthcare is delivered. The company is investing in companies that are using technology to address some of the biggest challenges in healthcare, such as chronic disease management, drug discovery, and patient engagement.

Here are some of the healthtech companies SoftBank has invested in:

Big Health: using digital therapeutics to expand access to non-drug alternatives for mental health.
Forward: building an entirely new health care system by empowering doctors with technology and data to monitor and guide long-term health outcomes.
Ping An Good Doctor: building a comprehensive, one-stop healthcare ecosystem platform.
Omada Health: A digital health company that provides weight loss and chronic disease management programs to patients.
Alto Pharmacy: A digital pharmacy that delivers prescription drugs to patients.
Ro Health: A telehealth company that provides primary care services to patients nationwide.
Proximie: empowering clinicians to virtually ‘scrub in’ to any operating room in the world.

SoftBank's investment strategy in healthcare is likely to continue in the years to come. The company has the resources, the track record, and the vision to make a significant impact on this sector.

Softbank Vision Fund 2

SoftBank Vision Fund 2 is a $100 billion venture capital fund that was launched in 2019. The fund is managed by SoftBank Group, a Japanese multinational conglomerate.

The goal of SoftBank Vision Fund 2 is to invest in technology companies that are developing new technologies that have the potential to disrupt existing industries. The fund has invested in a wide range of companies, including:

Arm Holdings: A British semiconductor company that develops chip designs for smartphones and other devices.
ByteDance: A Chinese technology company that owns the popular social media app TikTok.
Coupang: A South Korean e-commerce company that is often compared to Amazon.
Didi Chuxing: A Chinese ride-hailing company that is the largest in the world.
Ola: An Indian ride-hailing company that is the second largest in the world.

SoftBank Vision Fund 2 has been criticized for its large investments in companies that have not yet turned a profit. However, the fund has also been praised for its willingness to invest in innovative companies that have the potential to change the world.

Here are some of the key benefits of SoftBank Vision Fund 2:

It can help to accelerate the growth of technology companies. By providing large sums of capital, SoftBank Vision Fund 2 can help to accelerate the growth of technology companies by giving them the resources they need to expand and develop new products and services.
It can help to foster innovation. By investing in early-stage companies, SoftBank Vision Fund 2 can help to foster innovation by giving these companies the resources they need to develop new technologies and products.
It can help to create jobs. By investing in technology companies, SoftBank Vision Fund 2 can help to create jobs by providing these companies with the resources they need to expand and hire new employees.

Overall, SoftBank Vision Fund 2 has the potential to have a significant impact on the technology industry. The fund's large investments and focus on innovation can help to accelerate the growth of technology companies and create jobs.

Future of Softbank AI investments

Softbank is focused on a 3 layer AI investment strategy, from computational power to infrastructure to applications. The company is acquiring and investing in companies spanning the foundation layer, application layer and services layer.

Foundation Layer: Computational Power

Computational power is the ability of a computer system to process and execute instructions. It is measured in terms of FLOPS (floating-point operations per second). The higher the FLOPS, the faster the computer can process instructions.

Computational power is important for a number of tasks, including:

Scientific computing: Computational power is essential for scientific computing, which involves the use of computers to solve complex mathematical problems.
Machine learning: Machine learning is a type of artificial intelligence that relies on computers to learn from data. Computational power is essential for machine learning, as it allows computers to process large datasets and identify patterns.
Graphics processing: Computational power is also important for graphics processing, which involves the use of computers to generate and display images.

Application Layer: SaaS and Infrastructure

The application layer in AI refers to the use of AI technology to solve real-world problems. This can include tasks such as:

Natural language processing: This is the ability of computers to understand and process human language. It is used in a variety of applications, such as chatbots, machine translation, and text analysis.
Computer vision: This is the ability of computers to see and understand the world around them. It is used in a variety of applications, such as facial recognition, object detection, and self-driving cars.
Machine learning: This is the ability of computers to learn from data. It is used in a variety of applications, such as fraud detection, predictive analytics, and personalized recommendations.

The application layer in AI is constantly evolving, as new technologies are developed and new applications are found. As AI technology becomes more powerful, it is likely that the application layer will become even more widespread, with AI being used to solve a wider range of problems.

Services Layer: User Applications

The services layer is the layer in a multi-tiered application architecture that provides services to the user applications. It is responsible for providing the following services:

Data access: The services layer provides access to the data that is stored in the data layer. This data can be accessed through a variety of mechanisms, such as SQL queries, REST APIs, and SOAP APIs.
Business logic: The services layer implements the business logic of the application. This logic is responsible for processing the data and providing the functionality that the user applications need.
Presentation logic: The services layer provides the presentation logic of the application. This logic is responsible for formatting the data and displaying it to the user.

The services layer is a critical layer in a multi-tiered application architecture. It is responsible for providing the services that the user applications need to function.

Here are some examples of user applications that use the services layer:

Web applications: Web applications are applications that are accessed through a web browser. They use the services layer to access the data that is stored in the data layer and to process the data.
Desktop applications: Desktop applications are applications that are installed on the user's computer. They use the services layer to access the data that is stored in the data layer and to process the data.
Mobile applications: Mobile applications are applications that are installed on the user's mobile device. They use the services layer to access the data that is stored in the data layer and to process the data.

The services layer is a critical layer in all multi-tiered application architectures. It is responsible for providing the services that the user applications need to function.

Gearing up for a series of major new HealthTech investments

Softbank has a history of investing in the healthcare industry, and it has been making a number of moves in recent months that suggest it is interested in making more investments in this area.

For example, in January 2023, SoftBank announced that it was investing $700 million in Alto Pharmacy, a digital pharmacy that delivers prescription drugs to patients. This investment was the largest ever made in a digital pharmacy, and it signaled SoftBank's interest in the growing market for digital healthcare.

In addition, SoftBank has been investing in a number of other healthcare companies, including Livongo Health, a diabetes management company, and Omada Health, a weight loss and chronic disease management company. These investments suggest that SoftBank is interested in investing in a variety of healthcare companies, from digital health startups to traditional healthcare companies.

It is still too early to say for sure whether SoftBank will make a series of major new HealthTech investments. However, the company's recent moves suggest that it is likely to continue to invest in this area in the future.

Here are some of the factors that suggest that SoftBank is gearing up for a series of major new HealthTech investments:

The company's history of investing in the healthcare industry: SoftBank has a long history of investing in the healthcare industry. In the past, the company has invested in companies such as Livongo Health, Omada Health, and Guardant Health. This suggests that SoftBank has a strong track record of investing in healthcare companies and that it is likely to continue to invest in this area in the future.
The growing market for digital healthcare: The market for digital healthcare is growing rapidly. This is due to a number of factors, such as the increasing adoption of smartphones and tablets, the growing demand for convenience, and the rising cost of healthcare. The growth of the digital healthcare market suggests that there are significant opportunities for investment in this area.
SoftBank's recent moves in the healthcare industry: In recent months, SoftBank has made a number of moves that suggest it is interested in making more investments in the healthcare industry. For example, the company invested $700 million in Alto Pharmacy, a digital pharmacy that delivers prescription drugs to patients. This investment was the largest ever made in a digital pharmacy, and it signaled SoftBank's interest in the growing market for digital healthcare.

Overall, the evidence suggests that SoftBank is gearing up for a series of major new HealthTech investments. The company has a history of investing in the healthcare industry, the market for digital healthcare is growing rapidly, and SoftBank has been making a number of moves in the healthcare industry in recent months. These factors suggest that SoftBank is likely to continue to invest in the healthcare industry in the future.