Nov 10, 2020 - Economy

SoftBank says it's back

Softbank illustration

Illustration: Aïda Amer/Axios

SoftBank Vision Fund posted a nearly $18 billion operating loss for the fiscal year ended in March, and wrote down about 75% of its WeWork investment — but who cares if it managed overall gains of $9.6 billion, right? At least, that's the message SoftBank execs are expected to deliver to investors later today in a briefing focused on the two Vision Funds, according to a source familiar with the fund.

Why it matters: SoftBank famously raised about $100 billion in 2017 to back big tech unicorns, but disappointing bets like WeWork and Brandless raised questions about Vision Fund's, well, vision.

What they're saying: Since telling investors in May that it expects about 15 of its portfolio companies to go bankrupt, SoftBank now points out that some have raised new funding, all with lead investors not named SoftBank.

  • Some had up rounds, like Fanatics, goPuff, and Rappi.
  • Yes, but: Getaround, the peer-to-peer car rental company, saw its valuation drop to $700 million in its latest financing from $1.4 billion in the prior round. To be fair, the company was struggling even before the pandemic, yet managed to find its footing in the recent months.
  • Tokopedia had a pretty flat round, while Zymergen had a modest bump in valuation.

Meanwhile, SoftBank's second Vision fund is much smaller — $10 billion at the moment — and entirely financed by its parent company.

  • During Monday's earnings presentation, chairman Masayoshi Son told journalists SoftBank is "open always to third-party investors but at the moment we are not that popular yet."
  • The source familiar with the Vision Fund's operations tells Axios that the challenge is finding good deals, not capital. Once it exhausts the initial $10 billion, Vision Fund 2 may turn to outside investors.

What's next: Hopefully it'll be filing for its SPAC soon...

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