Technology is quickly changing the world, and owners of the companies doing the changing are reaping big rewards. New businesses are often privately held, though, excluding all but a select few investors. For those who want in on some of the hottest tech names today, there is a back way in by investing in Japan's SoftBank (SFTBF -4.79%).

Requirements to invest in private equity

Private equity refers to the practice of buying and funding privately owned companies -- those that do not have shares listed on a stock exchange that investors can purchase. In the technology industry, some of the fastest growing businesses today are privately held, funding their expansion with private equity from big investors in exchange for an equity stake.

These sometimes-lucrative deals are off-limits to most investors, though. Because of the extra risks that often accompany private companies -- like requirements to not sell for long time periods, limited parties to sell a stake to, and sometimes-unprofitable operations -- the Securities and Exchange Commission has put stringent requirements on who can participate. You have to be an accredited investor, satisfying at least one of the following: a net worth of $1 million, excluding the value of a primary residence, or income for at least two years of a minimum $200,000 if single and $300,000 combined if married.

Those definitions exclude most, but there is another way to get access to some of today's fastest-growing private tech: SoftBank, which operates the largest technology investment fund ever.

A picture of Softbank's "Pepper" robot, designed to be a work and family assistant in the future.

Softbank's business has been looking increasingly high-tech through acquisitions and new business segments. Image source: Softbank.

What's under the hood

SoftBank is one of Japan's largest telecom operators. The company has also diversified into other businesses and owns stakes in Sprint (S), operates Yahoo! Japan, and owns semiconductor maker ARM Holdings. SoftBank is also the operator of the Vision Fund, which has also received investments from the likes of Apple (AAPL -1.22%), Qualcomm (QCOM -2.36%), and sovereign wealth from the United Arab Emirates.

Vision Fund raised $100 billion and has already taken stakes in companies spanning the Internet of Things, artificial intelligence, mobile apps, financial technology, and biotechnology. Here is a breakdown of some of the biggest deals:


Deal Value



$8.5 billion

SoftBank gets 15% of Uber, and its investment partners 3%. Uber took a 30% hit to its valuation in the deal.

ARM Holdings

$8.2 billion

SoftBank transferred 25% of its ARM Holdings subsidiary to Vision Fund.

NVIDIA (NVDA -10.01%)

$5 billion

The stake in NVIDIA is reportedly worth $5 billion, also transferred to Vision Fund from SoftBank.


$4.4 billion

It provides shared work space and other services for start-ups.


$2.5 billion

A leading e-commerce platform in India.


$1.2 billion

Also expected to be offered to Vision Fund by SoftBank. OneWeb is a satellite-based internet service provider.


$1.1 billion

A drug holding company that builds subsidiary businesses around late-stage drugs and therapies.


$1 billion

An online retailer of sports merchandise.


$1 billion

Another SoftBank subsidiary that could be offered to Vision Fund, this one an online personal finance company.


$500 million

China's first online-only insurance company.


$500 million

A video game and virtual-world development start-up.

Vir Biotechnology

$500 million

A company focused on fighting infectious disease like HIV and influenza.


$460 million

An online car dealer based in Germany.


$450 million

An online real estate company connecting owners with buyers and renters.

Guardant Health

$360 million

The company develops blood-based tests for early cancer detection.


$300 million

An on-demand dog walking and care app.


$250 million

A budget hotel network based in India.


$250 million

Cloud-based software to help teams collaborate at work online.


$200 million

An indoor farming start-up.

Chart by author. Data source: Softbank press releases, Recode, and TechCrunch.

Vision Fund's tech holdings are diverse, and with the exception of NVIDIA, all privately held. For owners of SoftBank's stock, you get ownership of those businesses by way of the telecom's control over the fund. The company earns big fees from Vision Fund, especially if those investments keep growing.

Some caution is needed, though. Private equity is not for the faint of heart, as these companies can be volatile. Since they are not publicly traded, private deals can change the valuations very quickly (like what just happened with Uber) and dilute existing shareholder values. SoftBank is also mulling over spinning off a portion of its telecom business to investors, sharpening its focus as an investor in technology and start-ups. Investors thinking about buying SoftBank should be aware that what they are buying is not the same thing as a typical publicly traded company, but more like a private equity fund.

However, if high-risk, potentially big-reward private equity is what you're after, SoftBank could be your ticket.