SoftBank Vision Fund Reports Gain for First time, Recovering After 3 Years

SoftBank Vision Fund - Masayoshi Son

SoftBank reported a gain of 724.3 billion Japanese yen ($4.6 billion) on its Vision Fund in the fiscal year ending in March, marking the first time since 2021 that the flagship tech investment arm has been profitable.

During the entire fiscal year, SoftBank’s Vision Fund segment recorded a profit of 128.2 billion yen, a significant improvement from the 4.3 trillion yen loss reported in the previous year.

The recovery in the Vision Fund contributed to SoftBank Group’s return to profitability in the fiscal fourth quarter ending in March.

The increase in value of key investments, such as TikTok owner ByteDance and U.S. food delivery firm DoorDash, contributed to the improvement.

However, losses were incurred on other investments, including Chinese ride-hailing company DiDi and office-sharing company WeWork, which filed for Chapter 11 bankruptcy protection last year.

SoftBank Vision Fund – Masayoshi Son

The Vision Fund’s gain was largely driven by the initial public offering of chip designer Arm last year. SoftBank clarified that gains associated with Arm’s IPO, as a subsidiary of Softbank, are not reported in its consolidated statement of profit or loss.

Despite the positive indicators, SoftBank also reported that excluding gains associated with Vision Fund’s investments in its subsidiaries, the tech investment arm still posted a loss of 167.3 billion yen.

However, there are optimistic signs of recovery for SoftBank, which has faced challenges from poor investments in some tech firms and market volatility.

In the March quarter, SoftBank’s performance against LSEG estimates was as follows:

– Net sales: 1.75 trillion yen versus 1.84 trillion yen expected.
– Net profit: 231.1 billion yen versus a 71.64 billion yen loss expected.

For the full fiscal year, SoftBank reported total loss of 227.6 billion yen, narrower than the 970.1 billion yen loss from the previous fiscal year.

SoftBank Vision Fund – Masayoshi Son

SoftBank’s flagship tech investment arm, the Vision Fund, faced challenges in the fiscal year ending in March 2023, posting a significant loss amid a downturn in tech stock prices and setbacks in some of its investments in China.

However, in the June quarter of the previous year, the Vision Fund recorded its first investment gain in five consecutive quarters, indicating the beginning of a potential recovery.

SoftBank’s founder, Masayoshi Son, signaled in 2023 a shift to an offensive strategy, moving away from a defensive approach to increase investments.

Yoshimitsu Goto, SoftBank’s chief financial officer, stated that the company had transitioned to an “Alibaba to AI-centric portfolio.” Arm has become a crucial part of SoftBank’s portfolio, accounting for 47% of assets held by the company at the end of March, compared to 10% in March 2020.

“Arm is core to our AI shift,” Goto emphasized.

Nate O'Hara
Nathan is a seasoned commerce writer with a passion for unraveling the intricacies of the business world and distilling them into engaging narratives. During his academic journey, he delved deep into subjects like economics, marketing, and entrepreneurship, honing his analytical skills and developing a keen understanding of market dynamics.