SoftBank loses nearly $6 billion in a quarter as recession continues •

    SoftBank Group investment vehicles posted a loss of nearly $6 billion in the quarter ended December as the Japanese technology investor continues to bleed through the market downturn.

    This is the fourth straight quarter in which SoftBank Group has lost money, prompting many to challenge the fundamental contention of the giant, which has deployed more capital in technology markets worldwide than anyone else in the past decade.

    SoftBank said it lost $5.8 billion in Vision funds and Latin America funds in the quarter. While a $5.8 billion loss is nothing to write home about, SoftBank will take comfort in the fact that it lost $10 billion in the prior quarter.

    The company said the fair value of its current late-stage portfolio is more than $37 billion.

    In 2021, SoftBank was one of the most prolific investors in the world, cutting checks worth more than $20 billion in just a quarter as many investors aggressively rushed to land big deals. When the market turned around early last year, many lenders had to brutally recalibrate their strategies.

    SoftBank Vision Fund invested just $350 million in the quarter, according to a previous analysis by Bloomberg. understands that the amount SoftBank invested during the quarter was less than $350 million.

    While the financial health of SoftBank’s private investments is opaque, it’s clear how it’s performed in the public markets — and that’s not good.

    Overall, SoftBank Vision Fund 1’s holdings in its publicly traded companies have a fair value of $19.9 billion, compared to the $31.4 billion the giant has invested in them. Through the Vision Fund 2, SoftBank gave $48.3 billion to businesses and is currently looking at a loss of $17.6 billion.

    While SoftBank shares in Coupang have a $4.2 billion gain, the Japanese company has lost more than $9 billion in Didi and $5.1 billion in WeWork.

    On Tuesday’s earnings call, SoftBank said it is in “defense mode” and preparing for three different scenarios. The company expects the market to show a linear recovery this year, or by the second half of this year, or stumble into early 2024.

    SoftBank has been trying to discipline its portfolio companies over the past year as it became extremely difficult to raise money. Masayoshi Son, founder and CEO of SoftBank Group, warned that the funding winter for startups could prolong as some unicorn founders are unwilling to accept lower valuations in new funding deliberations. Son skipped the earnings call on Tuesday.

    More to follow.

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