SoftBank Group continues to receive a short end stick. Unlike last year, Softbank reported losses of a staggering $ 13 billion (1.7 trillion yen) during the fiscal year ended March 31. SoftBank made a healthy profit last year, which amounted to an impressive 4.99 trillion yen.
Last year’s SoftBank highs came from the impressive performances of numerous technology conglomerates, most notably South Korean e-commerce platform Coupang and Southeast Asian startup Grab.
The financial year was difficult for all venture groups in general, but for SoftBank a perfect storm was brewing, whose actions are controlled by CEO Masayashi’s son. Shares of both Coupang and Grab have fallen sharply, by about 60-70%.
While the whole world is affected by the consequences of the Russian-Ukrainian war, SoftBank had many other problems. The repression of the Chinese administration in the technology sector along with rising federal interest rates have led to lower stock prices of technology companies. SoftBank’s strategy is experiencing a direct hit as all of these factors combine.
Coupang and Grab were some of the main disappointments for the VC group, but the undisputed leader in their losses was Chinese startup Didi, engaged in Ride, which went public last year, only to have the Chinese regulatory assault take it off the list. US indices. Chinese e-commerce giant Alibaba has also become a place of concern for them as Alibaba has also experienced a sharp drop as a result of Chinese regulatory measures.
SoftBank fell to 32nd place out of 34 companies in their portfolio. The main contributor to these poor figures was Coupang ($ 5.4 billion), Grab Holdings Ltd. ($ 2.4 billion), Didi ($ 2.4 billion), Paytm ($ 1.3 billion) and food delivery company DoorDash Inc. ($ 1.1 billion).
As investor confidence begins to fall along with the stock prices of their portfolio companies, CEO Masayashi Son acknowledged the losses and acknowledged the need for SoftBank to move to protection. On Thursday, in a conversation with Profits, Son said they may be looking to halve the startup investment margin. “It depends on our LTV levels and investment opportunities, and we are achieving a balance, but I will say that compared to last year, the volume of new investment will be doubled or maybe even a quarter,” he said.
In the previous quarter, ending March 31, Softbank invested $ 2.5 billion, well below previous quarterly figures of $ 10.4 billion, $ 12.8 billion, $ 20.9 billion and $ 11.3 billion, respectively.
SoftBank is an important part of India’s venture capital ecosystem as they support several companies that are now well known, including Paytm, Flipkart, Ola, Oyo, Swiggy, Delhivery, InMobi and Lenskart. In the last fiscal year, the Indian company Policy Bazaar has made a profit of $ 300 million. The blow to their reputation has been very noticeable in the Indian market as well, because despite their history of turning companies into unicorns, with the latest CommerceIQDelhivery was not happy with the prospect of a SoftBank check.
Dan Baker of Morningstar Inc. still confident in the future of the group because, despite the volatility of their strategy, SoftBank is too big to waver to such a failure. “It’s not for everyone, but if you’re willing to put up with volatility, then if you look at the company’s long-term performance, it was actually pretty decent,” he said.