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SoftBank Sees Valuation of Its Investments Drowned in Q1

UTC by Benjamin Godfrey · 3 min read
SoftBank Sees Valuation of Its Investments Drowned in Q1
Photo: Depositphotos

In a bid to curtail these ongoing valuation declines, SoftBank’s Founder and Chief Executive Officer, Masayoshi Son has revealed plans for the Vision Fund vehicle to taper down its rate of investments which is also likely to reduce its overhead losses.

Japanese multinational conglomerate holding company, and financial services firm, SoftBank Group Corp (TYO: 9984) has posted its earnings results for the first quarter of the fiscal year ending March 31, 2023, with an unprecedented plunge in the valuation of its investments portfolio.

Per the results published, the banking giant came down with a 2.93 trillion Japanese yen ($21.68 billion) loss in its Vision Fund division.

The Vision Fund is the company’s venture capital arm but solely focuses on technology companies. The losses accrued by the Vision Fund are best attributed to the masses, coordinated decline in the share prices of these firms amidst a global economic meltdown fueled by rising interest rates.

SoftBank recorded quite a number of losses across several divisions and the reported loss on the Vision Fund contributed to the cumulative 3.16 trillion yen net loss for the quarter. This loss compares with the 761.5 billion yen profit in the same period last year and is arguably one of the biggest losses the firm has recorded on a quarterly basis in history.

Founded in 2017, the SoftBank Vision Fund comes off as one of the biggest players in the venture capital ecosystem and has injected capital into startups like ByteDance, the parent company of social media giant, TikTok, BlinkIt, DiDi Grocery, and Uber Technologies Inc (NYSE: UBER) to mention a few.

Over the past few years, the SoftBank strategy has also permeated the digital currency ecosystem, pioneering a dive into the world of Web3.0 with some strategic investments across the board.

SoftBank Portfolio Investments

Some of the outfits it has injected funds into Blockdeamon, a startup that is building an infrastructure to power the blockchain economy, The Digital Currency Group which is known to invest in digital assets, and blockchain companies as well as Candy, an outfit building an NFT platform that is redefining fan engagement through digital collectibles.

The majority of these platforms have taken a hit since the start of the year, as the ongoing plunge is an encompassing one.

In a bid to curtail these ongoing valuation declines, SoftBank’s Founder and Chief Executive Officer, Masayoshi Son has revealed plans for the Vision Fund vehicle to taper down its rate of investments which is also likely to reduce its overhead losses.

The company explained that its losses were “mainly caused by the global downward trend in share prices due to growing concerns over economic recession driven by inflation and rising interest rates.”

In all, SoftBank has continued to strategize in a way that the company can see more growth improvements over time. It has continued its share repurchase program of which the total came in at ¥704.8 billion worth of shares as of the end of July this year.

The slump in the SoftBank Group’s portfolio companies did not deter investors from going all out on the stock on Monday. At the time of writing, SoftBank Group shares are up 0.74% to 5,695 Japanese Yen.

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Benjamin Godfrey

Benjamin Godfrey is a blockchain enthusiast and journalists who relish writing about the real life applications of blockchain technology and innovations to drive general acceptance and worldwide integration of the emerging technology. His desires to educate people about cryptocurrencies inspires his contributions to renowned blockchain based media and sites. Benjamin Godfrey is a lover of sports and agriculture.

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