SoftBank’s Vision Funds recover with $426m income

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SoftBank‘s Vision Funds (SVF) generated segment income of 61 billion yen (US$426 million) in the first quarter of its 2023 financial year, recovering from the US$16.3 billion in segment losses it incurred in the same year-ago quarter.

This includes gains associated with SVF’s investments in shares of its subsidiaries, mainly in chip manufacturer Arm.

The recovery is primarily driven by a US$917.1 million gain on investments at Vision Fund 1 (SVF1), reversing from the US$9.2 billion in loss on investments it experienced in Q1 2022.

SVF1 generated unrealized gains for its portfolio of public companies, as share prices of Coupang, Grab, and Roivant increased. This couples with an unrealized loss for private portfolio firms – which it said reflects “markdowns of weaker-performing companies.”

Meanwhile, Vision Fund 2 also significantly narrowed its loss on investments to US$307.4 million from US$9.1 billion in the same period last year. However, it also saw weak private company portfolio performance for the quarter.

Meanwhile, gains on investments at SoftBank’s LatAm Funds and other investments under the Vision Fund segment contributed US$332 million and US$175.3 million, respectively.

Group-wide, SoftBank reported a net loss of US$3.3 billion, narrowing significantly from its net loss of US$22.1 billion in Q1 2022.

The recovery of SoftBank’s Vision Funds follows reports of the company testing the market for a potential financial debut for Arm, a move that could see the chipmaker raise up to US$10 billion.

One potential key to the success of the company’s IPO is its relevancy amid the AI boom. Arm CEO Rene Haas had already gone to say in a keynote earlier this year that the firm’s offerings are a key advantage in enabling AI tech moving forward.

See also: Plotting out SoftBank’s 2023 India roadmap