Al-Monitor said in a report that the Japanese SoftBank Group has great links with the Saudi royal family and the Saudi Investment Fund, but it has started making extensive investments in Israeli technology companies.
According to the site’s report, it was only a matter of time before the Japanese company SoftBank, considered one of the largest venture capital companies in the world, entered direct activity in Israel.
SoftBank has invested in Israeli high-tech companies, including AnyVision, eToro, Redis Labs and Trax, according to investment database PitchBook. Another investment, which appears less successful, was in WeWork, which was co-founded by Israeli Adam Neumann.
SoftBank Investments in the Gulf
SoftBank has significant investments in cooperation with investment firms from the Gulf states, including Saudi funds, and the assessment is that the normalization agreements Israel signed with the United Arab Emirates and Bahrain expedited the process and brought SoftBank directly to Tel Aviv.
The trade and economic relationship between Israel and Japan has increased in recent years, particularly due to the strong ties that were strengthened between former Prime Minister Benjamin Netanyahu and former Japanese Prime Minister Shinzo Abe.
Netanyahu arrived in Japan in 2014 and Abe responded with two visits, in 2015 and 2018. In doing so, the Japanese government delivered a clear message to the business sector to encourage business with Israel.
Accordingly, the number of Japanese companies operating in Israel has increased from 24 to 92 in the past six years, and the scope of Japanese investment in Israel is rising despite the coronavirus pandemic, and the positive momentum continues.
But the head of the economic and trade mission at the Israeli Embassy in Japan, Daniel Kolbar, said, however, that the potential for trade between Israel and the third largest economy in the world has not yet been realized, especially in light of Japanese interests in the Middle East and the effects of the Arab boycott that still exist in places certain. Thus, the effect of the growing rapprochement between Israel and Abu Dhabi could also bring Israel closer to Japan.
According to Kolbar, Dubai is a hub for Japanese companies, with around 350 companies.
Japanese companies that market Israeli technologies, such as those developed in research and development centers in Israel, can more easily develop them in Gulf markets.
Joint investments in renewable energy initiatives could also lead to trilateral cooperation, as well as cooperation in the areas of the Internet, agricultural technology and digital health.
Today, Japan’s SoftBank Group is one of the leading high-tech investment firms, with huge investments in companies such as Uber, Alibaba, Tiktok, DiDi and Klarna. It is the second investment giant to open an office in Israel within three months, after Blackstone appointed Yifat Oron as its local investment manager in April.
The former head of the Mossad is one of the engineers of normalization
One of the important points is the figure who will head the fund’s activity in Israel – Yossi Cohen, the former head of the Israeli Mossad, who is considered very close to Netanyahu. Some analysts even say he may one day replace Netanyahu as leader of Likud, Israel’s largest political party.
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Cohen was one of the architects of the normalization agreements, and his frequent travels to the Gulf states, even those with no ties to Israel, led to the formation of close and secret relations between Israel and these states.
Masayoshi Son, founder of Japan’s SoftBank Group, decided to hire Cohen, apparently because of his many proven abilities in the process that led to the agreements and because of his strong relationships with heads of state throughout the Middle East, as well as many leaders in Europe and the United States.
Cohen will direct SoftBank’s activity in Israel, identify companies to invest and help them find global markets, with a focus on Asia.
He is expected to work with SoftBank’s Europe and Middle East investment team.
As part of his role, he will be a member of SoftBank’s Vision 2 investment fund, which has raised $30 billion. But he will not participate, at least not publicly, in the Vision 1 investments, in which both the Saudi wealth fund and the UAE wealth fund, Mubadala, are investing.
One of SoftBank’s main investment directions in Israel will be corporate development of artificial intelligence.
The minimum investment, according to financial media reports, will be $50 million to grow companies worth at least $250 million, which proves that they have high-level artificial intelligence technology, whether it is technology used to find the right price for it. The right customer, or an organizational program that serves other organizations.
Cohen himself told the Israeli press, “SoftBank has pioneered a new approach to technology investment and has created the world’s largest ecosystem of emerging tech champions. Israel’s advanced technology and entrepreneurial culture make it a natural fit for SoftBank’s investment vision and I look forward to helping fast-moving companies expand in the region and the world.”
SoftBank Group and great connections with the Saudi royal family
The relationship between Japan, Israel and the Gulf states has a fourth axis: former senior members of the US administration participated in the contacts that led to the Ibrahim Agreement.
SoftBank announced this week that it will invest in private investment firm Liberty Capital, one of whose leaders was Steve Mnuchin, who served as Treasury Secretary under President Donald Trump, and is run by David Friedman, the former US ambassador to Israel, who is also from the United States. Trump administration.
SoftBank is known for its close ties to the Saudi royal family, and one can see in the Japanese investment giant a kind of twisted arm of Saudi investment in Israeli high-tech.
We can assume that the appointment of Cohen, who, according to many reports, met with senior Saudis, including Crown Prince Mohammed bin Salman, helped alleviate concerns, despite the lack of direct contact between Saudi Arabia and Israel. Perhaps this is the Saudi way of getting around the diplomatic barrier, communicating with Israeli high technology and reaping some of its benefits.