Softbank Corp., Asia’s largest Internet investor, announced Thursday it has formed a new venture fund aimed at companies building the core telecommunications and Internet infrastructure for the region.
The fund, which company Chief Executive Officer Masayoshi Son called in a statement, “one of the most significant ventures Softbank has undertaken to date,” will focus on companies working in the broadband, optical, wireless and Internet infrastructure technology areas.
In addition to announcing the establishment of the fund, Softbank also said it had attracted the first big investor: computer networking and infrastructure equipment maker Cisco Systems Inc. will invest US$1.05 billion over a period of several years in the fund.
Initially run out of the company’s offices in Tokyo and Hong Kong, the Softbank Asia Infrastructure Fund will be managed by a team that includes Son, Ron Fisher, who is vice chairman of Softbank Holdings Inc. and has responsibility for investment outside of Japan; Eric Hippeau, president of Softbank International Ventures and responsible for private equity activities outside of Japan, and Gary Rieschel, president of Softbank Venture Capital and responsible for the company’s private equity activities in the U.S. A full-time managing director will be appointed shortly, said Softbank.
Before the new fund was formed, the company already had interests in the region’s communications infrastructure. It helped establish Asia Global Crossing Ltd., which is building an undersea fiber network in the region, holds a significant stake in Hong Kong based service provider Asia Online Ltd. and is a majority shareholder in wireless infrastructure provider UT Starcom Inc. among other investments.
News of Cisco’s investment in the fund comes a week after Chief Executive Officer John Chambers was in Asia touring China and India. During his trip he met with government and business leaders in both countries and also agreed with India’s Ministry of Technologies to establish 34 Cisco Networking Academies in the country. The academies are part of a company program aimed at providing students with knowledge about how to design, build and maintain computer networks.
Separately, the two companies also announced Thursday that Cisco will buy out the majority of Softbank’s stake in Cisco Systems KK, its Japanese unit, and make a $200 million investment in Softbank Corp.