Sources: SoftBank has scrapped a planned $100M investment in Andy Rubin's Essential Products smartphone startup, which would have valued it at $1B
Masayoshi Son's decision to scrap deal with creator of Android software reflects unpredictable style — SoftBank Group Corp. scrapped …
Context & Ripple Effects
Andy Rubin's post-Android venture had been public since January, when sources said Essential was building a suite of consumer hardware products targeting a smartphone launch that year. SoftBank's scrapped $100M check — which would have set a $1B valuation — was the first sign that Son's enthusiasm for the project was not what the founder's résumé implied.
The story did not end there: within five months Essential closed a $300M round led by Tencent and Amazon, with Best Buy and Amazon as US retail launch partners, then spent 2018 weighing a sale while canceling its next phone before shutting down entirely in 2020. This article is the earliest data point in that arc.
First-order effects
- Essential enters its first funding cycle without SoftBank, losing a would-be anchor investor whose $100M commitment had implied a $1B valuation just months into the company's life.
- Masayoshi Son's willingness to abandon a signed-in-principle deal with the creator of Android becomes public, putting his dealmaking style — not Essential's product — at the center of the story.
Second-order effects
- Essential is pushed toward other backers and lands Tencent, Amazon, and others at roughly the same scale SoftBank would have provided, trading a strategic telecom-and-tech conglomerate for retail distribution partners instead.
- The episode signals to other hardware founders that SoftBank capital under Son is discretionary and reversible, raising the effective cost of counting on a SoftBank term sheet.
Third-order effects
- The full arc — a $330M-raised, $1B-valued startup founded by Android's creator ceasing operations by 2020 — points to how closed the premium smartphone market had become to new entrants, regardless of founder pedigree or backing.
- For SoftBank, the scrapped deal foreshadows the concentrated, conviction-driven deployment style that came to define the Vision Fund era: individual bets made and unmade at Son's discretion rather than through committee discipline.
The trend: Consumer smartphone hardware was consolidating against challengers — even an Android creator with top-tier backers could not sustain an independent device company — while SoftBank's investing grew more concentrated and personality-driven under Masayoshi Son.