SoftBank’s Vision Fund Suffers Amid Tech Stock Slide

SoftBank’s Vision Fund, a $100 billion pool of money designed to fund tech startups, is suffering from the market’s tech selloff, the Wall Street Journal reported Tuesday (May 10).

According to the report, the Japanese company is set to report results on Thursday (May 12). The stocks that make up much of the fund, started in 2017, have dropped by more than half since the start of the year.

Assuming SoftBank held onto its shares in those companies, it could be facing a loss of more than $25 billion, the Journal said.

The fund was last valued at $138.5 billion at the end of last year, with a return of around 40% over 54 months. Its losses since then mean the Vision fund has lagged behind the market as a whole, as well as behind other venture-capital funds.

See also: SoftBank Cuts Spending, Leaving Camera Startup Light Scrambling for Cash

PYMNTS noted SoftBank’s struggles last month after the company pulled its funding from Light, a Redwood City, California-based camera startup.

Reports at the time indicated that many of the 300-plus companies in the Vision Fund’s portfolio were losing money, leading SoftBank to abandon some of its loss-making ventures to adhere to stricter investment criteria.

SoftBank said it could contribute to Light if the startup found another major backer, but with SoftBank offering just a nominal amount, other investors were worried about investing.

“Their purse strings are tight as they have ever been,” one source said about Light.

The Vision Fund did well when tech stocks soared during the pandemic, seeing success with companies like Doordash and Coupang, the Korean eCommerce firm.

Learn more: SoftBank-Backed South Korean eCommerce Firm Coupang Files For IPO

But as the Journal story noted, those successes don’t seem as stellar these days. SoftBank made a more than $25 billion profit on a $2.7 billion investment following Coupang’s IPO last year, only to see that profit dwindle to under $6 billion.