SoftBank Virtually Halts New Funding as It Contends With Persistent Losses

SoftBank Group's investment vehicles posted a loss of nearly $6 billion in the quarter that ended in December as the Japanese tech investor continues to bleed through the market downturn and significantly pares back new backings. From a report: This is the fourth straight quarter in which SoftBank Group has lost money, prompting many to challenge the fundamental thesis of the giant, which has deployed more capital in the tech markets globally than anyone else in the past decade. SoftBank said it lost $5.8 billion across Vision funds and Latin America fund in the quarter. While a $5.8 billion loss is nothing to write home about, SoftBank will take comfort in the fact that it lost $10 billion in the previous quarter.

The company said the fair value of its current late-stage portfolio is over $37 billion. In 2021, SoftBank was one of the most prolific investors globally, cutting checks worth over $20 billion in just one quarter as many investors aggressively scrambled to win large deals. As the market reversed early last year, many backers have had to brutally recalibrate their strategies. The persistent losses are a big headache for Masayoshi Son, the founder and chief executive of SoftBank Group. With the days of zero interest capital environment, which saw investors raise record capital in the past two years, behind us, SoftBank might struggle to raise its next fund. It also has some intermittent issues to sift through before it goes about the next big fundraise.

tech-heavy

[timeOday]

Tech has really suffered off its Covid-fueled highs. Softbank is down 52% from its all-time high, whereas the S&P500 as a whole is only down 14% from its high. I'll be pleasantly surprised if the the tech bubble gets deflated without harming the wider economy too much.

Re:

[timeOday]

and for that matter the S&P500 itself is tech-heavy.

The Dow Jones is only 7% off its all-time high.

Re:

[Virtucon]

Philosophically I've never liked the DJIA, only 30 stocks. The Russell 1000 for example is up almost 9% over the past 3 years. [ftserussell.com]

Qualcomm

[DrMrLordX]

And that's why ARM Ltd. is in a legal battle over fees with Qualcomm (related to Qualcomm's acquisition of Nuvia and their ARM designs). Softbank needs more bank.

Destroyed?

[nicolaiplum]

"...which has deployed more capital in the tech markets globally than anyone else in the past decade."

I read that as "destroyed more capital" on the first skim through, and that's not wildly inaccurate either.

Masoyoshi Son is very good at transferring capital from his investors to others, not so good at transferring the other way. Adam Neumann was a particularly successful beneficiary of Son's investments, for example.

Re: Destroyed?

[reanjr]

Someone's gotta fund all those billion dollar startups with no viable business models. SoftBank has nailed it.

Re:

[haruchai]

Someone's gotta fund all those billion dollar startups with no viable business models. SoftBank has nailed it.

From Wiki:

Since Son founded SoftBank in 1981, he has made many investments, but the vast majority of those deals failed, and his reputation as an investor rests almost solely on his $20 million investment in Alibaba Group in 2000, a stake that was worth $130 billion in 2018

I'm sad that no one is left who could fund my Quantum Discombobulator

They make crazy valuations

[Ecuador]

Softbank makes some crazy valuations that obviously can't work. It's like a 10 year old has billions to invest and goes around putting money on shiny things. They gave over $4 billion to WeWork on a valuation of dozens of billions, based on, I, don't know, the air that could fit the properties they didn't even own? They are pumping money into Uber because maybe one day when they have self-driving cars they can make a profit? And since Uber is not making money off of Uber eats either, why not invest in DoorD

Re:

[fermion]

In the US there is one wework location left in the city I live. It is downtown. Outside the US there are four locations near my apartment. And a couple competitors. All are relatively expensive given the cost of living.

There is also a delivery service SoftBank is heavily invested in. Dozens of guys on bikes are always gathered near the park waiting for orders to deliver. Mostly just see them waiting.

They have clearly invested in places that they expected more economic growth. Beyond Covid, the world ha

Headline failure

[caseih]

I'd blame slashdot editors but they just ripped it from the TechCrunch article. The headline is virtual nonsense.

Tech investing is just roulette

[vladoshi]

No one knew who would succeed. The far superior Novell ,Unix and original MacOS lost out to MS. Quality is definitely not a factor to choose.