SoftBank Vision Fund arm posts record $32B loss

SoftBank Group posted a loss of nearly $32 billion for its Vision Fund vertical. And yet, moving on from its earlier defensive position on investments, the fund is now keen to back companies leveraging AI.

Thursday May 11, 2023 , 3 min Read

Key Takeaways

SoftBank posted a record loss of $32 billion for its Vision Fund in the financial year ended March 31, 2023.
Investments across Vision Fund I and II in FY23 dropped to less than one-tenth of the amount ploughed in during the previous year.
Firm says Delhivery and Paytm helped SVF I realise good returns.
Despite the losses, SoftBank plans to accelerate investments with a focus on AI.

SoftBank Group Corp, which has backed Delhivery, Paytm and Ola, made investments totaling only about $3.14 billion across its two primary funding vehicles in the 2022-2023 financial year–a significant reduction from $44.26 billion invested in the year prior.

The Japanese investment holding company also reported a record loss of $32 billion (4.3 trillion Japanese yen) across SoftBank Vision Fund I and SoftBank Vision Fund II, wider than the earlier loss of 2.55 trillion Japanese yen, as tech startups struggle through yet another difficult year.

And yet, SoftBank is looking to accelerate its investments with a focus on artificial intelligence, company executives said during an earnings call Thursday, contrasting CEO Masayoshi Son's earlier assertion that the firm would temper its investments in privately held companies.

“From a defence-only year to an offence year, we need to look from internal factors to external factors. The space of generative AI has been growing exponentially and we are all in for the use of generative AI,” said Yoshimitsu Goto, CFO and CISO at SoftBank Group Corp.

He added that this was a part of Son’s vision for a while now and that he had been closely working with British semiconductor and software design company Arm to scope out opportunities in the space.

“In the last six months a lot of services and products launched in the market–what kind of businesses can we create from those opportunities–is what we are working on,” said Goto.

The SVF I and SVF II investment vehicles recorded contrasting performances based on their portfolio mix.

SVF I, founded in 2017, registered $101.0 billion in cumulative returns on $89.6 billion of total investments. The gross gain for the fund stood at $11.4 billion, attributed to a rise in the share prices of publicly listed portfolio companies including DiDi, Coupang and DoorDash.

Goto said both Delhivery and Paytm helped SVF I realise good returns.

The fund's publicly listed portfolio in India includes Paytm’s parent entity One 97 Communications, Delhivery, PolicyBazaar's parent company PB Fintech, and Zomato.

Earlier in the day, SoftBank sold a 2% stake in Paytm through an open market deal.

SVF II, founded in 2019, registered $31.9 billion in cumulative returns on overall investments of $50.2 billion, with a gross loss of $18.3 billion for the fiscal year ended March 31, 2023.

Its portfolio in India includes Swiggy, Cars24, ElasticRun, MindTickle, Icertis, Eruditus, Ofbusiness, InMobi, and Juspay.