Vision Fund, the tech investment arm of SoftBank, reported a loss of 4.3 trillion yen for its fiscal year ended March 31.
softbank It posted a record loss of $32 billion for its Vision Fund tech investment arm amid a challenging period for tech stocks. For this Financial year ending 31st March, the Japanese investment holding company’s Vision Fund posted a 4.3 trillion yen ($32 billion) loss. The loss surpassed the 2.55 trillion yen that SoftBank sustained in the same period last year.
SoftBank’s latest overall Vision Fund investment loss of 5.28 trillion Japanese yen was higher than the 3.43 trillion yen loss reported a year earlier. The Tokyo-based financial conglomerate’s latest loss came despite a recent 2023 rally in tech stocks. The tech space endured one of its lowest lows in the past year, with the Nasdaq 100 index plunging 11% during SoftBank’s fiscal year.
SoftBank Vision Fund Losses Result of Private and Public Tech Valuation Markdowns
SoftBank is the most prolific global investor in tech startups, and it continues to feel the ill effects of valuation corrections across its private and public tech portfolio. During the quarter, the multinational investment holding company experienced portfolio markdowns of $2.3 billion to $138 billion. SoftBank said in its earnings report on Thursday:
“For private portfolio companies, the fair value of a broad range of investments decreased, primarily reflecting markdowns of underperforming companies and share price declines among market comparables.”
Amid a weak economy, SoftBank reported a 970.14 billion-yen net loss for the fiscal year. This figure is lower than the 1.7 trillion deficit created in the previous fiscal year. However, it still represents a considerable dent in SoftBank’s bottom line.
Despite benefiting from investments with high-profile companies including Uber (NYSE: UBER), SoftBank reported losses on other business interests. These include falling share prices of Chinese AI platform SenseTime and Indonesian e-commerce mainstay Goto. The company said it had unrealized losses of $1.6 billion each in SenseTime Group and GoTo. SoftBank also said it lost another $800 million in US online food delivery platforms. Doordash (NYSE: DASH).
SoftBank Chief Financial Officer Yoshimitsu Goto previously said the company had entered “defense mode” and was prepared for three different outcomes. Earlier this year, Goto reported that the investment firm expected a linear market correction through 2023. However, the SoftBank CFO said the expected recovery could happen in the second half of 2023 or early 2024.
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Tolu is a cryptocurrency and blockchain enthusiast based in Lagos. He likes to strip crypto stories down to the basics so that anyone anywhere can understand without a lot of background knowledge. When he is not delving deep into crypto stories, Tolu enjoys music, loves to sing and is an avid movie lover.
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