SoftBank’s Vision Fund segment posted a 4.3 trillion $32 billion loss

Key Points

• SoftBank’s Vision Fund segment posted a 4.3 trillion Japanese yen ($32 billion) loss for its fiscal year ending Mar. 31.
• SVF’s founder Masayoshi Son said the company will go into “defense” mode as a result of the headwinds.

SoftBank Vision Fund (SVF) is a subsidiary of SoftBank Group that invests in tech-enabled growth companies, especially in AI, biotech, cloud, and consumer internet sectors. SVF has two funds, SVF 1 and SVF 2, that seek to accelerate the AI revolution globally, and a separate fund, LatAm Funds, that focuses on Latin America. However, SVF has faced losses and write-downs in some of its portfolio companies due to market turmoil, inflation, interest rates, geopolitical tensions, and Covid-19. The Vision Fund unit lost ¥4.3 trillion ($32 billion) in the year ended March 2023. SVF’s founder Masayoshi Son said the company will go into “defense” mode as a result of the headwinds.

What is 'Defense Mode'?

SoftBank has said it is in defense mode, putting investing activity on the backburner with the Vision Fund unit striking just 25 new deals over the past year. This means that SoftBank is focusing on shoring up its balance sheet and bolstering its capital buffers. Looking to bolster its capital buffers, SoftBank raised $35.46 billion through prepaid forward contracts using Alibaba shares during the fiscal year. Around a year ago, Son said SoftBank would go into “defense” mode amid the headwinds and become more disciplined with its investments.