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Illustration: Eniola Odetunde/Axios

SoftBank's Vision Fund went from being in the red, with an annual operating loss of $18 billion at one point, to an $8 billion net profit in its most recent quarter — thanks in no small part to the past year's unexpected events.

Why it matters: While the Vision Fund's bet on a global shift to digital services is likely correct, it's hard to believe its financial performance would have rebounded so quickly had 2020 gone differently.

The pandemic...

  • It's been a huge accelerant for trends central to Vision Fund's thesis and many of its portfolio companies — food delivery, online education, e-commerce, and so on.
  • SoftBank's defensive moves in the spring, including stock buybacks and writing down more poorly performing companies, put it a position to benefit even more from the surprising boom on the stock market that followed.
  • Even WeWork—which fell so hard, so fast when it tried to go public in 2019 — could be the one office co-working company left standing after the pandemic. Regus properties have been filing for bankruptcy (and its parent company just acquired a majority stake in embattled women-focused clubhouse The Wing), as has Knotel, another venture-backed rival that was once valued at $1.6 billion.

The stock market...

  • It didn't get the memo that there's a global pandemic and massive economic hit — it just kept going up and to the right.
  • 11 of SoftBank's portfolio companies have gone public since the pandemic began, helping to contribute to the Vision Fund's $13 billion in investment gains just in the last quarter.
  • Even portfolio companies that were already public performed well, adding to the fund's recent success.

The other side:

  • For one, luck isn't everything — the fund's performance is tied to CEO Masayoshi Son's fundamental investment thesis staying focused on digital technologies.
  • A great market won't do very much for a portfolio of weak companies that won't be able to go public or continue to grow in value. In short: SoftBank did well in picking eventual winners.
  • And now, three-and-a-half years into the Vision Fund, SoftBank is past the trough of the expected J-curve, which is par for the course in venture investing. As they say: things get worse before they get better.

The bottom line: "Luck is what happens when preparation meets opportunity," Roman philosopher Seneca once wrote.

Go deeper

Ride-hailing companies are hopeful for vaccine-led business boost

Illustration: Rebecca Zisser/Axios

As Uber and Lyft look into 2021, both companies pointed to driver supply as a possible challenge when ride-hailing demand picks up again.

Why it matters: The companies delivered their 2020 Q4 earnings this week, with mixed results, and are hoping vaccination will boost their recovery later in the year as more people start to take rides again.

Scoop: U.S. begins denying Afghan immigrants

Afghan refugees on a bus bound for temporary housing after arriving in Greece. Photo: Byron Smith/Getty Images

The Biden administration has begun issuing denials to Afghans seeking to emigrate to the United States through the humanitarian parole process, after a system that typically processes 2,000 applications annually has been flooded with more than 30,000.

Why it matters: Afghans face steeper odds and longer processes for escaping to the U.S., despite the earlier sweeping efforts by the Biden administration to assist its allies. Immigration lawyers and advocacy groups say the government has set untenable barriers to a safe haven in the U.S.

3 hours ago - Politics & Policy

Dems invoke Robert Byrd to sell Manchin on Senate rules changes

Photo illustration: Shoshana Gordon/Axios. Photos: Diana Walker, Chip Somodevilla/Getty Images

A small group of Senate Democrats is privately invoking the legacy of late West Virginia Sen. Robert Byrd in an effort to sway Sen. Joe Manchin (D-W.Va.) to support their plans to change the chamber's rules, Axios has learned.

Why it matters: Manchin — who holds Byrd's Senate seat — has often referenced his predecessor's strong moral conviction and insistence on preserving the Senate as an institution, as justification for some of his tough positions.