Masayoshi Son Has A Deal You Can't Refuse

- Peter Elstrom, Pavel Alpeyev, and Lulu Yilun Chen

Early last year, Cheng Wei, founder and chief executive officer of the Chinese ride-hailing juggernaut Didi Chuxing, tried to resist taking money from legendary investor Masayoshi Son. Cheng told the SoftBank Group Corp. chairman he didn’t need the cash because his company had already raised $10 billion, according to people familiar with the matter. Fine, Son said. Then he suggested he might direct his support to one of Didi’s rivals. Cheng relented and took the investment: $5 billion in the largest fundraising round ever for a tech startup.

Son pulled a similar maneuver in November, publicly warning Uber Technologies Inc. that if he didn’t get the deal he wanted, his backing would go to archrival Lyft Inc. Uber also took the money—a $9 billion complicated stock transfer and investment deal announced on Dec. 29 that resulted in SoftBank gaining a 15 percent stake in the company.

Son has been an unstoppable force in the technology world over the last year. As he lined up a roster of big backers—Saudi Arabia’s crown prince and Apple Inc.’s Tim Cook among them—for SoftBank’s planned $100 billion Vision Fund, he took stakes in scores of businesses engaged in a dizzying array of activities: ride-hailing, chipmaking, office-sharing, satellite building, robot making, even indoor kale farming.

In deal after deal, according to people involved, Son encouraged founders to take more money than they wanted and wielded his outsize checkbook as a weapon. Along the way, he rattled rivals with his influence and changed the world of startup investing—for better or worse. “There really isn’t a precedent for this,” says Steven Kaplan, a professor at the University of Chicago’s Booth School of Business. “The jury is still out on whether it will work.”