Japanese investor and founder of SoftBank, Masayoshi Son, is widely hailed for his visionary and maverick investments. But of late things do not seem to be going his way.
After facing a setback from its two most coveted investments in recent times – Uber and WeWork – the Japanese conglomerate has been finding hard to raise investment for its second Vision Fund.
This has cast uncertainty over its investment plans in one of its key markets India, where it plans to invest $2-4 billion.
SoftBank, despite signing a term sheet with startups, has not been able to pour in money. Two of its major investment announcements this year in Lenskart and Delhivery have been on hold for more than six months despite getting a green signal from its Indian and global team.
Both announced investments are to come from the second Vision Fund, which does not have sufficient capital, said a Mint report quoting sources close to the development.
SoftBank Vision Fund 1 period ended in September. It reported a loss of $6.4 billion, while the inaugural Vision Fund reported an operating loss of $9 billion for the quarter ended Sept 30.
The losses are largely attributed to Softbank’s huge bet on WeWork, which reduced its valuation to $10 billion from a $47 billion, and Uber, which is now trading much below its price post IPO.
This has also worried existing investors like Saudi Arabia’s Public Investment Fund and Abu Dhabi’s sovereign wealth fund Mubadala Investment, who are now susceptible to invest a large amount in SoftBank.
All this has also led to a change in strategy for the Japanese conglomerate.
In past one year, SoftBank has also tweaked its existing strategy for India. Largely known for investing in hefty rounds with hefty amounts, the investment firm now looks to invest relatively smaller amounts of $100-200 million.
Apart from investing through SoftBank Vision Fund, the firm had planned to use its venture capital arm SoftBank Ventures Asia to place early-stage bets. Though it has not made a single bet this year.