Japanese investor SoftBank Group Corp’s tech-focused Vision funds reported an investment loss of 583.3 billion yen or $3.86 billion for the first half of this fiscal year. This loss was attributed to the weak performance and lower valuations of some of its bets, including a slump in shares of WeWork.
Excluding gains made by the Vision funds through investments in its subsidiary companies, such as the freshly-listed chipmaker Arm, the SoftBank Vision segment incurred an investment loss of 583.3 billion yen during Jan-Sep. However, when including these gains, the Vision segment made an investment profit of 181 billion yen during the same period. It’s important to note that these gains have been excluded at a consolidated level.
“The fair value of public portfolio companies decreased due to lower share prices, and the fair value of private portfolio companies decreased mainly reflecting markdowns of weaker-performing companies,” stated the company in its second-quarter earnings filings.
SoftBank’s Vision Funds have made high-profile bets on tech and tech-enabled companies worldwide, including TikTok owner ByteDance, food delivery app DoorDash, Singapore’s Grab, Nvidia, Blinkit, and Oyo, among others.
Vision Fund I reported a sequential decline of 3.7% in the fair value of investments held at September-end, primarily due to a decline in share prices of Chinese artificial intelligence firm SenseTime and US-based Vir Biotechnology, among others. This decline was partially offset by an increase in the share price of China’s ride-hailing giant DiDi.
Vision Fund II recorded a more significant decline of 7% in the fair value of investments compared to the June quarter. The fund was affected by a decline in share prices of robotic firms AutoStore and Symbotic and office space provider WeWork, which recently filed for Chapter 11 bankruptcy protection.
Both funds have made a cumulative investment of nearly $142 billion in tech companies to date. Fund I, which started in 2017, has generated returns of $104.4 billion, while Fund II, initiated in 2019, has made $31.5 billion to date.
Last year, SoftBank’s Vision funds incurred an investment loss of 5.32 trillion yen, following a series of unprofitable investments and write-downs. In the first half of this year, the company also faced a foreign exchange loss of 648 billion yen due to the impact of a weaker yen and exposure to US dollar-denominated liabilities.
This led to a second-quarter loss of 258.9 billion yen or $1.7 billion for the Vision funds segment, compared to a 1.02 trillion yen loss in the year-ago period. Overall, SoftBank Group Corp reported a net loss of 931 billion yen in Q2, smaller than the 3.03 trillion yen net loss in the same quarter the previous year.