SoftBank, one of the world’s leading technology investors, has reported a record net loss of $6.3 billion in its Vision Fund business. The loss includes an impairment loss of $4.6 billion, primarily related to its investments in WeWork, Uber Technologies, and other Vision Fund portfolio companies.
SoftBank’s Vision Fund business is a technology-focused venture capital fund, formed in 2017, with investments that range from billion dollar buyouts of companies to startup investments. It recently took a big hit due to the dismal performance of its investments in WeWork and Uber, both of which have seen steep drops in market value in recent months.
SoftBank has stated that the losses in Vision Fund are the result of a changing business landscape in the technology sector. The company noted that it was unable to predict the changes that some of its investments would face, and as a result, has had to take a more conservative approach to investing.
SoftBank CEO Masayoshi Son has stated in a call with reporters that “the Vision Fund business still has a long way to go to achieve its desired performance”. The company will continue to review its investments and determine the appropriate course of action in order to minimize losses.
SoftBank has also announced its plans to raise $41 billion through a mix of asset sales, debt, and an equity offering. The company is currently in talks with several banks to raise funds for its investment activities in the short term.
The company hopes that with these measures, it will be able to weather the storm and rebound into profitability. With the Vision Fund having now posted a loss, SoftBank will need to rethink its strategy and reevaluate its investments in order to regain its footing in the tech industry.
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