SoftBank Vision Fund, the world’s largest tech-focused investment fund created by SoftBank founder and CEO Masayoshi Son, lost a record $32 billion in the fiscal year ending in March, the company said today (May 11) in its annual and quarterly report. The results came even as SoftBank scaled back on risky investments and entered a “defense mode” in the past year.
SoftBank is a Japanese telecom and internet conglomerate. Its business includes a nationwide telecommunications network in Japan, Yahoo! Japan, and the social media app Line, among others. Vision Fund is a venture capital unit focusing on investing in tech startups with high growth potential. To date, SoftBank has launched two funds—Vision Fund 1 in 2017 and Vision Fund 2 in 2019—investing a total of $200 billion in tech companies globally. Its most notable bets include Uber, WeWork, Slack and Alibaba, among others.
Vision Fund’s upstream investors include Saudi Arabia’s sovereign wealth fund Public Investment Fund (PIF), Abu Dhabi’s Mubadala Investment Company, and SoftBank itself.
Where did SoftBank Vision Fund lose money?
Most of Vision Fund’s portfolio companies are unprofitable, and the fund’s performance relies heavily on the macroeconomic climate and startup valuation trends. As rising interest rates in the past year drained startup funding and tumbled valuation, loss from the Vision Fund unit in fiscal 2022 widened 70 percent from a year ago, today’s earnings report shows.