SoftBank Group Corp’s plan to launch the Vision Fund 2 has been frozen after it faced difficulties to raise capital following the WeWork fiasco, Nikkei Asian Review reported late Monday.
A representative of Softbank declined to comment to DealStreetAsia.
In July 2019, SoftBank had announced the plan for Vision Fund 2. It was estimated to raise at least $108 billion from backers including Apple, Microsoft, Foxconn Group and the sovereign wealth fund of Kazakhstan. Vision Fund has around $100 billion in investments.
In February, SoftBank had said it was weighing launching a second, smaller fund, which would precede the launch of Vision Fund 2. Chairman and CEO Masayoshi Son said at the time that the conglomerate didn’t “need to pursue that size right now” and instead, it might start from a smaller scale and shorter investment period.
SoftBank didn’t immediately reply to DealStreetAsia’s request for comment.
Reports pertaining to the freezing of the second fund came in after Softbank announced on Monday its Vision Fund would post a 1.8 trillion yen ($16.72 billion) loss for the fiscal year ended 31 March, citing a drop in the fair value of investments.
The IPO for one of the fund’s investments, WeWork, was scuttled in September. The co-working giant had attempted to go public last year, but the sudden transparency revealed deep losses and corporate governance problems. That sent WeWork’s valuation tumbling from around $47 billion to below $8 billion, resulting in the ouster of its founder-CEO.
In February, Son had said the fund would not offer rescue packages to its portfolio companies, which include Slack, ByteDance, Ping An, Grab, Tokopedia and VNLife.