SoftBank broadcasts almost $32 billion failure history at its Vision Fund tech acquisition member

May 12, 2023: SoftBank is a document failure for its Vision Fund as a final rally in tech stocks has done little to support another challenging year for its flagship investment unit.

The Japanese firm’s Vision Fund segment posted a 4.3 trillion Japanese yen loss for its fiscal year, which ends Mar. 31, versus a 2.55 trillion yen loss in a similar period before a year.

SoftBank posts a total loss on investments at its Vision Funds of 5.28 trillion Japanese yen versus 3.43 trillion yen before a year. Despite a rally in tech stocks, they are broadly lower than a year ago. The tech-heavy Nasdaq 100 index dropped 11% during SoftBank’s financial year.

Overall, SoftBank posts a net loss of 970.14 billion yen for the fiscal year, which narrows the 1.7 trillion loss in the familiar period a year before.

Despite gains from exiting assets in high-profile companies like Uber, SoftBank logged losses in areas including the share costs of Chinese artificial intelligence company SenseTime and Indonesian ride-hailing and e-commerce firm GoTo.

Over the past year, SoftBank has been exiting some of its highest-profile investments to raise cash. It is narrowing its overall losses through sales of shares in T-Mobile and Alibaba. It persists in offloading some of its shares in the latter company via a forward contract derivative after Son made his fortune with an early investment in Alibaba over two decades ago.

In August, it stated that it had sold its which remains stake in U.S. ride-hailing giant Uber.

According to the Japanese giant’s Chief Financial Officer Yoshimitsu Goto, SoftBank has invested in well-capitalised firms. He said SoftBank has several companies valued at $37 billion, ready to go public. He did not name these firms.

The brainchild of related Masayoshi Son, SoftBank’s Vision Fund comprises Vision Fund 1 and Vision Fund 2. It invests in high-growth stocks, which have faced global headwinds from rising interest rates, causing investors to sell out of riskier equities like tech.

Amid mounting losses, Son’s key ally and prime SoftBank executive Rajeev Misra stepped back from a few of his roles at the company. Misra was instrumental in the starting days of the Vision Fund, which was established in 2017.

Before a year, Son stated that SoftBank would go into “defence” mode amid the headwinds and become more disciplined with its investments.

That tactic worked in SoftBank’s fiscal fourth quarter from January to March, supported by the rally in tech stocks. SoftBank’s Vision Funds registered investment losses of 236.8 billion yen in the last versus 730.3 billion yen in the reason before.

SoftBank said it is making $3.14 billion in new or follow-on investments in its financial year, decreasing from $44.26 billion a year prior.

On Thursday, during a press conference, Goto said it had been an “unstable” marked by geopolitical risks and financial system instability, citing the decrease of Silicon Valley Bank and problems at Credit Suisse.

“In the first quarter, we may witness some signs of improvement. However, we are not anticipating a fundamental resolution for those issues,” Goto stated.

He nevertheless stated that artificial intelligence technology is making “dramatic progress” with the firm, weighing up whether to stay in defence mode.

“With those related, should we just keep in defence, or should we keep a balance with the offence?” Goto asked.