SoftBank Vision Fund CFO: Predictive analytics ‘will drive value’

Smarter analytics will 'forecast future performance, identify untapped opportunities, expose hidden risks, and assist in strategic decision making,' Navneet Govil, SoftBank Vision Fund CFO, said at PEI's CFO & COOs Forum last week.

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SoftBank, which has a remit to invest in disruptive technology companies, will increasingly look to see cutting edge analytical technology provide actionable insight for itself, its 150 portfolio companies and, eventually, the financial sector at large.

Navneet Govil, SoftBank Vision Fund CFO, made comments around quantum computing and artificial intelligence as it pertains to private markets during a spotlight discussion conducted by PEI Media editorial director Rich Melville at this year’s virtual CFOs & COOs Forum, held last week.

“Finance will move from just descriptive analytics – looking back at what happened – and prescriptive analytics – determining how likely an outcome is to happen – to actually, ultimately driving value for organizations through predictive analytics, which involves forecasting future performance, identifying untapped opportunities, exposing hidden risks, and assisting in strategic decision making,” said Govil.

SoftBank portfolio company IonQ, with whom it announced a strategic partnership earlier in the month, provides quantum computing resources at a fund level to try to do just that, according to Govil, who also recommends those resources to his portfolio company CFOs.

The Vision Fund also employs a homebrewed financial insight system, simply called Finsight, to aggregate financials across its network of portfolio companies, and a robotic process automation tool from another of its portfolio companies, Automation Anywhere, to create a digital ‘worker’ that can execute processes in human-facing user interfaces, Govil added.

The result: the future of finance will focus on end-to-end processes, eliminating finance silos and driving efficiencies to do with reporting cycles and information management.

These technologies will allow firms to work through current processes more quickly, while at the same time isolating new trends across data that previously would have been difficult to parse, according to Govil.

Issue of the hour: Inflation

Govil also played down growing concerns of inflation, which surged in the US to the highest level in 13 years as consumer prices rose 5 percent in May year-on-year, saying that SoftBank chalks up recent inflationary concerns as a market headwind stemming from the covid-19 pandemic.

SoftBank Vision Fund’s investment thesis focuses on “investing in the most disruptive technology companies that leverage AI,” and since the Vision Fund is in its fourth year of a 14-year trajectory, Govil feels the firm can ride out business and inflation cycles, despite the fact that longer-duration assets are typically more affected by inflation.

“The best predictors of success of our portfolio [during this time] is the quality of the technology stack of that portfolio company, the size of the addressable market and the focus on unit economics and scalability,” Govil said.

“Even though inflation is important, if you get any of those other things wrong, the company is going to fail regardless of inflation.”

Conner Hussey contributed to this report.