Remember when the top investors and companies in tech were reacting to SoftBank’s every move? These days, we are picking through the latest results from the Japanese conglomerate and its Vision Fund to see how things went wrong, and where it is still succeeding with its startup portfolio.
First up, this fund appears to be out of additional money to spend, as Arman Tabatabai and Danny Crichton found buried in the footnotes of its new regulatory filing. Meanwhile, as they tallied on TechCrunch, the losses have piled up lately:
The Vision Fund officially lost $17.4 billion in value according to SoftBank’s financials for the year ending this past March 31. The year before, SoftBank had registered a positive gain in the Vision Fund’s value of $12.8 billion, which means that the damage of this year’s performance has completely wiped out all gains the fund had made in the previous year. But the real shock is the performance of the fund’s underlying portfolio companies. The Vision Fund currently has 88 active portfolio companies that have not exited. Of those, 19 investments saw a gain in combined value of $3.4 billion according to SoftBank, while 50 companies saw a decline in value aggregating to $20.7 billion in losses. 19 portfolio companies were left unchanged in value.
Is this worse than what the rest of the market at large is going through? Here’s Alex Wilhelm’s view on Extra Crunch:
To some degree this feels counter-narrative. Tech shares have rebounded in recent weeks, rebuilding sentiment in the sector —perhaps the COVID-19 downturn won’t be that bad, the thinking seems to go. The SoftBank Vision Fund’s results paint a more negative picture of the economy: It’s bad in many areas, lots of companies are impacted and the value of many unicorns is too high, even if the scale of write-downs that private investors like venture capitalists will have to endure is not yet clear. The private market can, therefore, expect a host of down-rounds if unicorns need to raise capital in the short-term. And many will. The Vision Fund report card, then, is an indication that enterprise software is doing as well as we might have thought, that there are some winners in the health-tech space and that, aside from those exceptions, the rule appears to be a downturn in startup land.
Emphasis mine. Arman and Danny also broke out Arm’s financials for EC and what that top SoftBank company shows about the future of semiconductors. And, for both education and amusement, they provided a commentary about SoftBank’s in-depth and sometimes bizarre presentation about the results.