SoftBank Bets on Virtual Worlds, Invests in U.K.’s Improbable

Japanese telecommunications/Internet titan SoftBank Group just led a $502 million investment round in Improbable, a London-based startup that makes virtual worlds for video games and real-world simulations. In exchange, SoftBank will take a board seat and a non-controlling interest in Improbable, although details of the deal were not released. SoftBank founder/chief executive Masayoshi Son’s growing interest in artificial intelligence and the Internet of Things has been a driver in the company’s recent deals.

The Wall Street Journal lists some recent SoftBank deals: a $100 billion technology-investment fund with a Saudi sovereign-wealth fund, and the $32 million purchase of British chip designer ARM Holdings. The investment in Improbable is “an unusually large, single investment for a startup in the U.K., which has tried to position itself as a destination for tech talent and financing.”

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Although London is home to Apple and Alphabet, and major universities in Cambridge and Oxford anchor a global research hub, startups have been restricted by a lack of access to investment capital. Son’s $100 billion tech fund, based in London, is likely a game changer, and “his bet on Improbable is another vote of confidence.”

According to SoftBank managing director Deep Nishar, Improbable’s technology “will help us explore disease, improve cities, understand economies and solve complex problems.” Improbable, founded in 2012 by University of Cambridge alumni, created a platform that “lets developers of multiplayer online games create virtual worlds that adhere to real-world constraints such as population growth, traffic flow and the spread of diseases.”

Co-founder/chief executive Herman Narula notes that Improbable is now “branching out into real-world applications,” because of his belief “that government agencies and utility companies would be interested in Improbable’s technology, because it can show how small changes in a city can affect traffic, telecommunications and infrastructure.”

Narula pinpoints uses of Improbable’s technology in “disaster preparation, simulating how millions of people would move, make phone calls and use electricity during a tsunami or terrorist attack.” After meeting SoftBank’s Son, Narula said the two have “similar visions of the future.”

The SoftBank-led investment included follow-up investments by Silicon Valley’s Andreessen Horowitz and Horizons Ventures, the fund of Hong Kong billionaire Li Ka-shing. Improbable will use the investment to “speed up its growth and hire more people in its London and San Francisco offices.”