SoftBank Group‘s Vision Fund recorded a record loss of 4.3 trillion yen ($32bn) for its latest financial year – marking the second year of losses for the Japanese investment company.
The results mirror a global fall in venture capital funding in 2022, pushed on by geopolitical tensions and rising inflation.
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SoftBank‘s major investment losses come despite a recent rally in tech stocks.
The Tokyo-based company invests in a wide variety of high-profile firms, from mobile giant T-Mobile to delivery leader Uber.
However, the company said the value of its investments has fallen due to unstable economic factors, including Russia’s invasion of Ukraine and the cost of living crisis.
The fair value of SoftBank’s overall portfolio decreased over the latest quarter by $2.3bn to $138bn, TechCrunch reported.
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By GlobalDataIn an earnings report on Thursday, SoftBank Group said: “For private portfolio companies, the fair value decreased in a wide range of investments, mainly reflecting markdowns of weaker-performing companies and share price declines among market comparable companies.”
Despite two consecutive years of losses, Softbank continues to claim it is putting its money into forward-thinking companies, including those involved in the metaverse, robotics and artificial intelligence (AI).
The Japanese investor said it hopes the market will start to show recovery no later than the beginning of 2024.
The recorded losses from Softbank follow global venture capital investment falling dramatically last year.
The total value of global venture capital investment in 2022 totalled $280bn, a substantial decrease from $487bn the previous year, according to analyst GlobalData.
Global venture capital increased greatly from 2020 to 2021, rising from $208bn to $487bn.
GlobalData is the parent company of Verdict and its sister publications.
