Softbank fund warns of $16.7bn loss due to virus
SoftBank expects to lose $16.7bn (£13.3bn) on firms it has invested in through its tech start-up fund. The Japanese conglomerate is the world’s biggest technology investor through its $100bn Vision Fund. Some bad investments have seen the fund’s valuation drop substantially leading to Softbank’s first loss in 15 years.
Softbank blamed the poor performance on a "deteriorating market environment" hammered by the coronavirus pandemic. The company as a whole has stakes in some high-profile tech firms and start-ups either through the fund or via the Softbank group. These include co-working office provider WeWork, satellite operator OneWeb and US telecoms firm Sprint, which has merged with rival T-Mobile US.
The Vision Fund has made some large bets on start-ups including Uber, Indian hotel chain Oyo and South-East Asia’s fast-growing ride-hailing app Grab, along with China’s equivalent Didi Chuxing.
Many of these firms have suffered from the coronavirus lockdowns being imposed across the globe. A large portion are linked to consumer spending, travel and transportation. But Softbank also has a stake in Chinese short-video firm ByteDance which owns the popular TikTok app, which has seen a huge surge in traffic as young people stay at home during school closures.
Source: BBC News