he world’s biggest technology investor has lost a record $20.5 billion (£16.8 billion) as its bets turn sour.
Japan’s SoftBank blamed the loss at its investment unit on “a decline in the share price of most listed portfolio companies” due to an “avoidance of high-growth technology stocks in anticipation of higher interest rates.”
SoftBank made headlines in 2017 after announcing its $100 billion Vision Fund, at the time the largest ever tech investment fund.
Announcing the fund, SoftBank CEO Masayoshi Son said: “SoftBank has long made bold investments in transformative technologies and supported disruptive entrepreneurs.
“The SoftBank Vision Fund is consistent with this strategy and will help build and grow businesses creating the foundational platforms of the next stage of the Information Revolution.”
The fund, and its smaller successor the Vision Fund II, made huge bets on companies like Uber, WeWork and Cambridge-chip maker ARM.
SoftBank attracted criticism in some quarters for overvaluing firms and funding what many claimed were unsustainable business models.
High profile missteps include WeWork, Greensill and Wirecard.
SoftBank lost around 90% of the $10.3 billion it invested in the office sharing start-up WeWork and was forced to bail it out after an aborted IPO in 2019. The collapse was so spectacular it was recently turned into an Apple TV mini-series staring Jared Leto.
SoftBank invested $1 billion into German payment business Wirecard at a time when it was facing claims of accounting irregularities. The company subsequently collapsed and executives have been charged with fraud.
The Japanese company was also forced to write off $1.5 billion invested in Greensill Capital, the controversial British finance firm that filed for insolvency in March 2021.
Son said today: “In terms of personality, I do like to play offense. Now is the time for SoftBank to be defensive.”
Plans to sell British chipmaker Arm to Nvidia for $66 billion were recently aborted after regulators raised objections. SoftBank now plans an IPO for the business.
The huge loss at SoftBank’s investment arm pushed the wider group to a 1.7 trillion yen (£10.8 billion) loss for the year ending March 31.
Korean-Japanese billionaire Masayoshi Son founded SoftBank in 1981.
Shares have dropped 17% since the start of the year.