SoftBank posts record $32 billion loss at its Vision Fund venture arm, just 6 months after it reported a $50B loss

SoftBank, the Japanese conglomerate that was once considered a high-flyer with billions in profit, has become a money-losing machine after it reported losses for three consecutive quarters. This year, SoftBank had another challenging year for its flagship investment unit.

The company’s investment arm, Vision Fund, reported a record loss of 4.3 trillion Japanese yen ($32 billion) for the fiscal year that ended on March 31 despite a recent rally in tech stocks. This loss is significantly higher than the 2.55 trillion yen loss the company reported during the same period the previous year.

Even though tech stocks have seen a rally this year, they are still lower than what they were a year ago. The Nasdaq 100 index, which is heavy on tech, has declined around 11% during SoftBank’s fiscal year. SoftBank has posted a net loss of 970.14 billion yen for the fiscal year, which is a slight improvement from the 1.7 trillion loss in the same period the previous year.

Although SoftBank made gains from exiting investments in high-profile companies such as Uber, it still recorded losses in areas like the share prices of Chinese AI firm SenseTime and Indonesian ride-hailing and e-commerce company GoTo.

The news comes just six months after SoftBank reported it lost $50 billion in just 6 months. The company also laid off 30% of its global workforce. A month before, August 2022, SoftBank reported its biggest loss ever, posting a $23.4 billion in quarterly loss as the global market sell-off spread to tech stocks and shredded valuations at its Vision Fund unit.

Following a huge loss on his tech bets, SoftBank CEO Masayoshi Son had no choice but to make tough decisions to stop the bleeding including company-wide cost-cutting measures and layoffs.

Launched in 2017, SoftBank’s Vision Fund invests in tech startups and high-growth companies.  Shares of its portfolio companies ranging from South Korean e-commerce firm Coupang to DoorDash were hit hard in the second quarter of the year.

‘Defense’ mode

Son said back in May 2022 that the company would go into “defense” mode and be more “conservative” with the pace of investments after posting a record 3.5 trillion Japanese yen loss at the investment unit for the last fiscal year. Son also plans to cut staff at the Vision Fund, adding there were no “sacred areas.”

Founded in 1981 by Masayoshi Son in September, the Tokyo, Japan-based SoftBank is a multinational telecommunications and internet corporation focused on broadband, fixed-line telecommunications, e-commerce, internet, technology services, finance, media, and marketing, and other businesses. Softbank is the sixth-largest telephone operating company with total revenue of $74.7 billion. The company has invested in a lot of startups including Uber.

Softbank Vision Fund has stakes in the following companies: Arm Holdings, Fortress Investment Group, Boston Dynamics, Sprint (85%), Alibaba (29.5%), Yahoo Japan (48.17%), Brightstar (87.1%), Uber (15%), Didi Chuxing (ca.20%), Ola (ca.30%), Renren (42.9%), InMobi (45%), Hike (25.8%), Snapdeal (ca.30%), Fanatics (ca.22%), Improbable Worlds (ca.50%), Paytm (ca.20%), OYO (42%), Ping An Insurance (7.41%)[6], Slack Technologies (ca.5%), WeWork (ca.80%), ZhongAn Online P&C Insurance (5%), Compass (ca.22%), AUTO1 Group (ca.20%), Wag (45%), Katerra (ca.28%), Cruise Automation (ca.19.6%), ParkJockey[7], Tokopedia (Indonesia), and many more.