SoftBank reported a gain of 7.24 billion Japanese yen ($4.6 billion) on its Vision Fund in the fiscal year ended March, marking the first time the tech investment arm has been profitable since 2021. The Vision Fund segment posted a profit of 128.2 billion yen for the full fiscal year, a significant improvement from the 4.3 trillion yen loss the year before. The recovery in the Vision Fund was attributed to gains in the value of investments in companies such as ByteDance and DoorDash, although there were losses from investments in companies like DiDi and WeWork, which filed for bankruptcy protection.
The gain in the Vision Fund was largely due to the initial public offering (IPO) of chip designer Arm, a subsidiary of SoftBank. However, gains associated with the Arm IPO were not included in the firm’s consolidated statement of profit or loss. Excluding these gains, the Vision Fund posted a loss of 167.3 billion yen. Despite this, SoftBank’s overall financial performance showed signs of improvement, with a net profit of 231.1 billion yen for the March quarter, surpassing expectations.
SoftBank’s Vision Fund faced challenges in the previous fiscal year, posting a record loss of around $32 billion amidst a decline in tech stock prices and unsuccessful investments in China. However, the fund began showing signs of recovery in the June quarter of the same year, with its first investment gain in five consecutive quarters. Founder Masayoshi Son indicated a shift to an “offensive” strategy, moving away from a cautious approach to increase investments. The firm has shifted towards an AI-centric portfolio, moving beyond its reliance on Alibaba and exploring opportunities in artificial intelligence technology.
SoftBank’s growth into one of Japan’s largest companies was fueled by Son’s early investment in Alibaba in 2000, which has since seen significant success. The company has been reducing its stake in Alibaba and focusing on investments in the AI sector. Senior executives like Son and CFO Yoshimitsu Goto have expressed enthusiasm about the potential for SoftBank to invest in AI companies and accelerate growth in this area. Despite past challenges, SoftBank’s recent financial performance and strategic shifts suggest a promising outlook for the future.
