SoftBank's Vision Funds have now posted paper losses of over $49bn in the past two quarters as the downward trend for tech stocks puts pressure on its parent company.

Telecommunications and internet group SoftBank plans to cut staff at its Vision Funds, which suffered a ¥2.92 trillion ($21.7bn) paper loss in the three months ending June 2022 as the stagnant stock market continues for tech companies. Masayoshi Son “For SoftBank Vision Fund, we know we have to reduce operational costs substantially,” said SoftBank CEO Masayoshi Son (pictured) today. “Our vision remains the same, our beliefs remain the same. But we know we have to reduce operational costs, including headcount. For new investments, we have to be more selective.” Although not as large as the $27.4bn loss recorded by the Vision Funds the previous quarter, the result compounds the damage. The headline figures included a $2.17bn loss from SoftBank’s investment in South Korea-based e-commerce marketplace Coupang, $1.75bn from Chinese artificial intelligence technology producer SenseTime and $1.63bn on US-based food delivery service DoorDash, revealing problems that span multiple sectors and regions. The cumulative gain from Japan-headquartered SoftBank’s investments through the two funds is now listed as only $11bn pre-tax, from a total of $154bn committed to the vehicles. Should the portfolio continue to lose value, it will soon be operating at a loss. Vision Fund 2 (SVF2) is already doing so, maintaining a portfolio that has lost $9.9bn in value since it made its investments. Son has responded by announcing he plans to cut numbers at SoftBank Investment Advisers (SBIA), which manages the funds, adding to an exodus of high-level executives from the division in the past 18 months. Vision Fund figures trigger wider corporate loss SoftBank’s Vision Fund I (SVF1) suffered a $9bn unrealised loss during the quarter in addition to a $226m loss realised from exits of portfolio companies. SVF2 made a $24.5m net profit due to the sale of its stake in real estate marketplace KE Holdings but recorded a $9.8bn decline in the valuation of its portfolio. The figures were part of a wider loss for the company, which posted a $23.5bn net loss for the three-month period, the largest in its history and more severe even than the $16.4bn loss SoftBank recorded in the previous quarter. The results were attributed to a combination of falling share prices for SoftBank’s publicly listed companies and the weak yen. The first Vision Fund closed at $98.6bn but over $65bn of that came from external backers – most prominently from Saudi Arabia’s Public Investment Fund and Abu Dhabi’s Mubadala Investment Company. However, $53.4bn of the capital for SV2 is SoftBank’s,…

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Robert Lavine

Robert Lavine is special features editor for Global Venturing.