SoftBank Faces Backlash Over Chaotic Strategy As Pinterest and Lyft Prep IPOs
Limited partners voice concerns over the SoftBank Vision Fund's chaotic decision-making and inflated valuations, raising ethical questions for portfolio startups. Meanwhile, Pinterest and Lyft take steps toward highly anticipated public offerings.
Limited partners express serious concerns about the SoftBank Vision Fund's chaotic investment strategy, accusing the massive fund of overpaying for equity and artificially inflating tech startup valuations. These criticisms surface as SoftBank leads major funding rounds for Clutter and Flexport, while also participating in DoorDash's massive $400 million raise. Because Saudi Arabia's Public Investment Fund serves as the Vision Fund's largest investor, this spending spree raises difficult ethical questions about whether startup CEOs should acknowledge the controversial sources of their capital.
The tech IPO market heats up significantly this week as Pinterest confidentially files to go public with an expected valuation of $12 billion by June. The visual search company joins a growing roster of unicorns seeking public markets in 2019, a move that promises massive returns for key backers like Andreessen Horowitz and Bessemer Venture Partners. In a parallel push, ride-hailing giant Lyft prepares for its own Nasdaq debut in March, setting up a direct race with its much larger rival, Uber.
DoorDash secures the top deal of the week despite ongoing controversies regarding its practice of using customer tips to subsidize driver wages. Venture capitalists confidently pour $400 million into the food delivery platform, boosting its valuation to an impressive $7.1 billion. This hefty investment highlights a continued willingness among Silicon Valley investors to prioritize rapid scale and market dominance over immediate public relations challenges.