Vision Fund’s $17.3b in losses drag SoftBank Q1 earnings down

Japanese conglomerate SoftBank saw a net loss of almost 3.1 trillion yen (US$23 billion) for the quarter ended June 30, weighed down by its losses in investments from its Vision Funds segment.

The Vision Funds, which posted a total of about US$17.3 billion in losses, saw its investments in publicly listed companies depreciating amid concerns of an economic recession.

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SoftBank also attributed the investment loss to declines in fair value in its private portfolio companies. In addition, the Japanese conglomerate named Coupang, SenseTime, DoorDash, AutoStore, and WeWork as loss-makers after their shares fell in value.

The investment funds also saw foreign exchange losses of US$6 billion for the quarter, which the firm attributed to a combination of the Japanese yen weakening and fund procurement subsidiaries exceeding their US dollar-denominated allocations.

In its 2021 financial year, SoftBank posted an annual investment loss of US$27 billion due to key investments being battered by rising interest rates and a clampdown by Chinese authorities on tech giants.

During the fund’s annual general meeting earlier this year, SoftBank founder Masayoshi Son announced that the fund will be backing smaller and fewer deals after its losses in its 2021 financial year.

The Japanese conglomerate has also turned to selling portions of its stake in Chinese tech giant Alibaba to raise funds for its second Vision Fund, which has had trouble attracting outside investments.

See also: Why Saleswhale sold its business to this SoftBank-backed unicorn

Currency converted from Japanese yen to US dollar: US$1 = 135.1 yen.

Correction (Aug. 9, 1.37 p.m. SGT): The article and headline were updated with corrected figures.