SoftBank invested $20 million in Alibaba in 2000. 14 years later, that tiny stake was worth more than $50 billion after its blockbuster IPO

Masayoshi Son put $20 million into Alibaba in 2000, when Jack Ma was still trying to convince investors that his online marketplace could work. The company had little revenue, and its future was far from certain. Fourteen years later, Alibaba's stock market debut turned Son's early investment into one of the best-known deals in technology history. What Son saw in the company before most investors did is what makes the story worth looking at.

Jack Ma struggled to find investors until Masayoshi son saw an opportunity

Alibaba wasn't the giant e-commerce company people know today when Ma approached Son. Ma, a former English teacher, wanted to use the internet to connect businesses with buyers. It was a straightforward idea, but building a successful company around it was another matter.

According to accounts of the deal, Ma had already faced rejection from more than 30 investors. Alibaba had yet to establish a strong revenue base, leaving potential backers with little financial evidence to judge its prospects. Ma had an idea he believed in, but he still needed someone willing to put money behind it.


Son agreed to invest $20 million. Some accounts describe the decision as unusually quick, with Son offering the money after listening to Ma's pitch for just a few minutes. The speed makes for a memorable story, though it shouldn't overshadow the bigger decision: Son was committing money to a business that had not yet proved it could succeed.

The timing was far from comfortable. The dot-com crash around 2000 wiped out huge amounts of value across the technology sector, and SoftBank suffered heavy losses. Investing in an internet startup was no guarantee of success.

How Alibaba's IPO changed the value of Son's early investment

For SoftBank, the listing put a public-market value on an investment made when Alibaba was still relatively unknown. Reports placed the value of Son's holding at tens of billions of dollars, with some estimates reaching $75 billion. Such figures depend on the share price and the date used to calculate the stake's value.

A holding worth billions on paper isn't the same as money already collected from selling shares. Still, the increase from an initial $20 million investment shows how valuable an early stake can become when a company grows on a global scale.

The deal also offers a more practical lesson than simply trusting your instincts. Son backed Ma before Alibaba had established its position, but the investment paid off because the company went on to build a large and enduring business. Plenty of other startups never reach that stage.

Son could not know exactly how Alibaba would develop in 2000. He made a bet on its founder and the potential of online commerce. The results became clear over the years that followed.