SoftBank vision funds gain $3.6 billion in value in December quarter as tech stocks recover

SoftBank Group CEO Masayoshi Son

Japanese conglomerate SoftBank’s two Vision Funds registered a combined gain of $3.6 billion in the October-December period, the third consecutive quarter of being in the black, amid early signs of recovery in tech stocks .

The Vision Fund 1 gained $1.9 billion and the Vision Fund 2 of $1.7 billion during the quarter.

In the September quarter, the two funds cumulatively gained around $300 million in value. While Fund 1 recorded gains of $2.4 billion, Fund 2 logged a loss of $2.1 billion.

The investor in companies like chipmaker Arm, social media powerhouse ByteDance and e-commerce giant Alibaba has slowed its pace of investing over the past couple of years as tightening of central bank policies singed funding and valuations in tech.

It also counts Indian tech unicorns like Ola, Delhivery, Paytm, Policybazaar and Meesho among its portfolio companies.

After playing defence for some time, SoftBank said mid-last year it is looking to take a more active investing role again, particularly by focusing on artificial intelligence.

Meanwhile, the parent SoftBank Group booked a $6.39 billion quarterly profit in the quarter, returning to black after four straight quarters in the red.

It marks a long-awaited turnaround for SoftBank and its founder Masayoshi Son whose reputation for having a Midas touch with investing was hit after the failure of high-flying office-sharing startup WeWork.

More pain came when SoftBank's portfolio of tech startups in its two Vision Funds - which commanded high valuations between 2020 and 2021 - fell out of favour in the higher interest rate environment that followed the pandemic.

To improve its financial position, SoftBank sold almost all of its "crown jewel" stake in Chinese e-commerce group Alibaba.

In recent quarters, SoftBank has carefully restarted investing and it remains to be seen how much more of an aggressive stance the company might take.

It recently set out stringent quality and valuation criteria for investments, but with few deal announcements to go on, analysts are hoping for clarity on how many companies currently seeking out investment fit the bill.

(with agency inputs)