By
Bhushan Akolkar
April 25th, 2024
Analysts expect that the Vision Fund investment arm of SoftBank Group turned a profit and might announce as much in its upcoming report.
SoftBank Group’s Vision Fund may finally turn a profit after multiple losses due to the current boom surrounding artificial intelligence (AI). After five quarters where the Japanese giant recorded losses, Vision Fund’s involvement in several startups working on AI tools may bring a profit.
According to analysts’ estimates, SoftBank Group would likely announce a profit of ¥73 billion in its expected report on Tuesday. Although they also expect a profit specifically for the fund for the quarter ended June, the figure may be moderate. Over the last two fiscal years, SoftBank’s Vision Fund lost ¥6.9 trillion – about $48 billion.
For the June quarter, Astris Advisory analyst Kirk Boodry estimates that Vision Fund’s public holdings rose by $1.1 billion. According to Boodry, the largest influences on the increase are Grab Holdings Ltd. and DoorDash Inc (NYSE: DASH), both of which rose 14% and 20%, respectively. SoftBank shares also contributed to the estimated rise, jumping 31%, while e-commerce company Coupang Inc. rose 9%. Boodry says public holdings climbed $3.9 billion in July alone. He believes that the Vision Fund will conclude its strongest performance since the January-March quarter of 2021 if its performance continues at the current pace.
In May, SoftBank’s Vision Fund reported a ¥4.3 trillion ($32 billion) record loss for the fiscal year ended March 31st. The deficit was more than 68% worse than the loss reported for the same period in the previous year. Although SoftBank recorded gains from a few companies, including Uber (NYSE: UBER), it was unable to withstand losses from others. For instance, SoftBank said it lost $1.6 billion each in GoTo and SenseTime Group. DoorDash also cost the company $800 million.
SoftBank and Vision Fund May See More Profit from Arm IPO
In March, SoftBank decided to pursue a US-Only IPO for its semiconductor technology firm, Arm. Although the initial plan was a listing in the UK, Arm CEO Rene Haas confirmed the US listing in a statement. According to Haas, the US option is the best way forward for the company and its stakeholders, despite continuous engagement with the British Government and the UK’s Financial Conduct Authority (FCA), which lasted a few months.
Arm was listed in London until its $32 billion acquisition by SoftBank in 2016. At the time, the British government was criticized for losing its largest tech export.
Arm has announced an IPO valuation target of between $60 billion and $70 billion. The IPO is expected in September and could be the largest for 2023. Arm is a chip manufacturer for some of the world’s largest semiconductor companies, including Nvidia, Intel, Qualcomm, and AMD. Already, some of these companies have expressed interest in participating as anchor investors in the IPO.
SoftBank might see its fortunes improve following the IPO. Arm currently hopes to raise between $8 billion and $10 billion. The IPO could be the largest-ever tech offering since Meta Platforms in 2012 and Alibaba Group in 2014.