Last week, SoftBank announced a staggering record loss of $32 billion for its flagship Vision Fund during its most recent fiscal year, as the once seemingly unstoppable Japanese company continues to wrestle with mounting investment losses.
Unicorn hunter
Although it has roots back to the early 80s, SoftBank became a global powerbroker in the tech world thanks to the launch of its Vision Fund in 2017.Led by CEO Masayoshi Son, the Vision Fund — anchored by $45bn from Saudi Arabia’s PIF — immediately became the world’s largest venture capital fund, hunting for, and often creating, the next "unicorns" (companies valued at more than $1bn) around the world. All told, the fund launched with more than $100bn, and through aggressive investments in companies like WeWork, Uber, DoorDash, Klarna, Flexport, Grab and many others, it quickly became a kingmaker for any company looking to raise investment and “blitz scale”.
What goes up…
At its peak, SoftBank’s funds had gained more than $66bn in value — gains that have since been wiped out despite a modest resurgence in tech stocks this year.
In order to cover these substantial losses, the company has resorted to selling its most profitable and notable holdings. In August, it announced the sale of its remaining stake in Uber and offloaded approximately $29 billion worth of its Alibaba shares last year as well. Indeed, the Japanese conglomerate confessed that it had “effectively” used all of its remaining shares in Alibaba for financing.
SoftBank now pins its hopes on the forthcoming Arm IPO, where it holds a 25% stake, as a potential source of additional funds, as it begins to aggressively pursue investments in AI.
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