Japan-based internet and telecommunications group SoftBank disclosed in its annual report yesterday that it expects to lose ¥1.8 trillion ($16.8bn) from its Vision Fund in the fiscal year ending last month.
The loss will be booked on paper and reflects the ongoing issues faced by portfolio companies including co-working space provider WeWork, which SoftBank had to bail out with up to $9.5bn in financing in October, and satellite internet service developer OneWeb, which filed for bankruptcy last month.
The loss has led to SoftBank freezing its second Vision Fund, Nikkei reported yesterday. It had initially targeted about $100bn but had already been facing ongoing difficulties in fundraising.
Vision Fund was launched in 2017 and ended up raising $98.6bn from SoftBank, Middle Eastern sovereign wealth funds Mubadala and Public Investment Fund, and corporate backers Apple, Foxconn, Sharp and Qualcomm.
The fund has invested quickly but few of its larger deals have paid off and the Covid-19 pandemic has led to several of its consumer-facing portfolio companies seeing revenue drop severely.
E-commerce platform Brandless shut down in February this year having raised $240m in a SoftBank-backed round in 2018 while portfolio companies including Oyo, Fair.com, Zume and Wag have all launched redundancy drives. Its ride hailing investments – which represent several of Vision Fund’s most highly valued assets – have had orders plummet.
SoftBank chairman and chief executive Masayoshi Son has said the corporate will not offer rescue financing to other Vision Fund portfolio companies. It had reportedly been in talks with investors last month to raise $5bn for Vision Fund that it planned to match itself.
