SoftBank posts record $32b Vision Fund losses in FY22

SoftBank Group founder Masayoshi Son / Photo credit: SoftBank

SoftBank Group recorded a US$5.9 billion loss in the financial year ended March 31. It recovered about 46% compared to the previous year but continued to see major dips for its Vision Funds.

In the company’s latest earnings report, it reported a US$32 billion loss in its Vision Fund investments, dipping further compared to the US$19 billion loss it saw in the previous financial year. This marks the company’s largest recorded loss for the investment vehicles, which came even amid a recent rally in tech firms’ valuations.

SoftBank shared that since their inceptions, Vision Fund 1 has seen a US$11.4 billion gain while Vision Fund 2 has incurred US$18.3 billion in investment losses.

The company said that Vision Fund 1 saw a realized net gain on investments of about US$1.5 billion in the current financial year, which it mainly attributed to exits from eight portfolio firms, including Uber. However, losses came from declining share prices of other companies in its portfolio, including GoTo, SenseTime Group, and DoorDash.

Meanwhile, Vision Fund 2 saw continued beatings from the declining share prices of WeWork and AutoStore during the financial year.

Helping cushion the blow from both funds is SoftBank’s divestment of its shares in Alibaba. The company said it received US$35.5 billion through prepaid forward contracts using shares of the Chinese ecommerce giant. It raised an additional US$4.1 billion through similar contracts for the period after April 1.

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According to a recent note from CreditSights, the Alibaba sell-off may put more pressure on both Vision Funds, with the two investment vehicles representing about 22% of SoftBank’s total asset value.