SoftBank Group seen booking modest fourth quarter loss as Vision Fund suffers
SoftBank Group is expected to report a net loss of 26.9 billion yen ($184.4 million) for its fourth quarter, marking a significant downturn compared to the 231 billion yen in profit recorded during the same period last year. Analysts attribute this loss to the declining valuation of early-stage tech startups in SoftBank’s Vision Fund, which have suffered in a tough investment climate. The company’s struggles come amid a broader investor shift away from high-risk tech ventures.
Despite the losses, some factors helped cushion the blow. A stronger Japanese yen and gains in telecom holdings like T-Mobile, which saw its share price surge over 20% during the quarter, provided partial relief. However, many of SoftBank’s portfolio companies, including Swiggy and Ola Electric, saw their valuations plummet by nearly 40%, reflecting wider struggles in the quick commerce and electric vehicle sectors.
Analysts, including Nomura’s Daisaku Masuno, estimate a collective $900 million loss from listed Vision Fund firms. Data from Crunchbase also indicates that venture capital funding in early-stage startups—especially those under Vision Fund 2—fell to a five-quarter low. Instead, investors favored more established tech companies, highlighting a risk-averse sentiment that further pressured SoftBank’s aggressive investment strategy.
SoftBank made some high-profile bets during the quarter, announcing a $20–30 billion investment commitment to OpenAI and purchasing chip startup Ampere Computing for $6.5 billion. While these moves signal the company’s pivot toward artificial intelligence, analysts remain skeptical. Critics argue these investments might not deliver near-term returns and point to a lack of clear profitability amid fierce competition in the AI space.
The weak IPO environment has also hindered SoftBank’s ability to generate returns from its unlisted assets. Klarna and Oyo have postponed their planned listings due to geopolitical tensions and shifting market dynamics, including new U.S. tariffs. However, PayPay, a SoftBank-owned payments firm, is preparing to go public, offering a potential bright spot in an otherwise challenging quarter.
Source: Reuters