He SoftBank’s Vision fund has widened its losses during its past fiscal year, which ended in March. In total, the Japanese investment giant, perhaps the one with the largest investment in technology startups, lost 32,000 million dollars in that period. The reasons are varied, although according to Techcrunch they are mainly due to the correction of the valuations of its startups, both private and public. Also to the weakening of the global economy.
The Vision fund losses are 70% higher than those registered by SoftBank the previous year, when it lost 19,000 million in the fund. Its growth is more than remarkable, despite the fact that the company has become very careful for several quarters when it comes to investing new capital in startups.
Among the most notable losses recorded by the fund are $1.6 billion in SenseTime Group and as many in GoTo. Also another 800 million dollars in DoorDash. As for the fund’s own value, it fell by 2,300 million dollars last quarter, to 138,000 million dollars.
SoftBank’s chief financial officer, Yoshimitsu Goto, already stated earlier this year that the company had entered what he called the “defense phase” and was preparing for three recovery scenarios: one in which it starts linearly this year , a second in which the recovery begins in the second half of 2023, and a third, in which there will be no recovery until the beginning of 2024. Of the three, the latter is the worst.
Meanwhile, the difficulties of SoftBank’s Vision fund are leading to a somewhat difficult situation for many of the startups Softbank has invested in. Of these, many are posting losses. Until now, the fund has not only contributed to its growth with successive investments, but has also served as a focus of attraction for other investors. But the situation has changed, and from now on SoftBank is going to be much more careful with its investments.
In the last year, the company has closed 25 investment agreements, for a total value of 400 million dollars. Much less than at its highest investment peak, reached in 2018 with billions invested, sometimes in a single company, as happened with WeWork, which failed amid a management scandal.
For now, SoftBank tries to present a scenario of stability in its investment portfolio, since they estimate that 94% of the companies in which they have invested money have sufficient liquidity to survive for a minimum of 12 months.
As a positive point, the SoftBank Group has highlighted that ARM’s future IPO is proceeding smoothly. But it is not yet known when the company will debut on the floors, nor most of the details of the process. If all goes well, SoftBank could raise a considerable amount of funding, giving it a nice boost.
