Softbank Contends US A Poor Investment

    June 17, 2005
    WebProNews Staff

The investment concern Softbank Asia Infrastructure Fund has closed its Silicon Valley offices.

The one-time backer of several pre-dotcom bust businesses has finished raising $600 million and will now focus its efforts on China and other Asian countries, according to Silicon Beat.

Softbank Contends US A Poor Investment

One of SAIF’s partners provides some scathing criticism of US startups. Joe Zhou, based in Beijing, commented on SAIF’s change of strategy. He seems to hold the potential of American firms with contempt.

Zhou attributed this change in strategy to the superior performance of Asian companies in the first portfolio. By comparison, U.S. deals are too risky – early stage and expensive to fund, not to mention technology-heavy.

“Let’s say I put $10 million in a U.S. company – it probably lasts 18 months,” said Zhou, “and when I do that it’s probably not even profitable. In China, chances are that when we do the $10 million deal the company’s profitable and [the funding’s] going to last a long time.”

Mr. Zhou must still be a little sore over SAIF’s ill-advised $125 million USD investment in online grocer WebVan just before its pricey IPO and subsequent crash.

Another fund partner, Cisco Systems, may share similar sentiments based on comments made by its CEO, John Chambers, who said “If I wasn’t American, I would be Chinese.”

Mr. Chambers has earned total compensation of $40.2 million during his tenure as Cisco CEO. Not bad for a businessman who has to endure the horrific US business climate.

David Utter is a staff writer for WebProNews covering technology and business. Email him here.