Softbank Vision Fund Sees Hard Landing with $32B Record Loss
SoftBank’s Vision Fund, the Japanese conglomerate’s technology investment arm supported by Gulf sovereign wealth funds, reported a $32 billion loss for its recent fiscal year ending March.
The loss increased by roughly 70% over the same time last year, when SoftBank announced losses of $19 billion in the Vision Fund unit. The losses occurred despite SoftBank’s increased caution in previous quarters when allocating new financing to companies.
Softbank said its Vision Fund 1 made an unrealized loss of $1.6 billion each in SenseTime Group and GoTo and nearly $800 million in DoorDash.
The losses from the unit, which included SoftBank’s Vision Fund 1, Vision Fund 2 and its LatAm Funds, led the SoftBank Group as a whole to record a net loss of $7.2 billion.
The fair value of SoftBank’s portfolio was marked down over the quarter by $2.3 billion to $138 billion.
“For private portfolio companies, the fair value decreased in a wide range of investments, mainly reflecting markdowns of weaker-performing companies and share price declines among market comparable companies,” SoftBank Group said in earnings report.
Masayoshi Son, the founder of SoftBank, told investors that there will be stricter investing criteria going forward and a more defensive stance a year ago because of the weakening private market. The business announced that it will play both offense and defense this year because it believes the emergence of generative AI presents huge prospects.
Although SoftBank has significantly reduced the amount of cash it has deployed, it may still see some possibilities for investment. The segment invested $15.6 billion in the first quarter of the fiscal year 2021, but only $400 million in the most recent quarter.
