SoftBank reports $37b Vision Fund profit on the back of Coupang gains

FILE PHOTO: Japan's SoftBank Group Corp Chief Executive Masayoshi Son bows his head after his presentation at a news conference in Tokyo, Japan, Nov. 5, 2018. REUTERS/Kim Kyung-Hoon/File Photo

SoftBank Group Corp on Wednesday reported a 4.027 trillion yen ($36.99 billion) fourth-quarter profit at its Vision Fund unit after booking a gain on investment Coupang, underscoring its recovery a year after a record loss.

“It’s clearly validation of Masa’s thesis,” Navneet Govil, Vision Fund’s chief financial officer, told Reuters in an interview, referring to Masayoshi Son, the company founder and CEO.

Group net profit was 4.99 trillion yen in the year ended March. That compares with an 962 billion yen loss a year earlier after teetering tech bets depressed the value of its portfolio.

Market enthusiasm for tech stocks drove the public listing of SoftBank-backed e-commerce firm Coupang and used-car trading platform Auto1 Group and the rising share price of ride-hailing firm Uber during the quarter.

Much of Vision Fund’s gain is on paper with the value of the portfolio locked up in the stock market amid concern over frothy valuations and a boom in special purpose acquisition vehicles (SPACs) which has drawn regulatory scrutiny.

The total fair value of the first $100 billion Vision Fund and the smaller second fund was $154 billion at the end of March, with SoftBank distributing $22.3 billion to limited partners.

SoftBank has hiked its committed capital in the second fund to $30 billion from $10 billion, reflecting the breadth of investment opportunities, Govil said.

Two of SoftBank’s highest profile bets, space sharing firm WeWork and ride-hailing firm Grab, have outlined plans to list via SPAC mergers, with Vision Fund reportedly in talks to use its own such vehicle to list portfolio company Mapbox.

SoftBank has exhausted much of the $2.5 trillion buyback programme launched last year, with shares hitting two-decade highs in March before slipping in line with weakness in U.S. tech stocks.

Investors’ attention is focused on whether other portfolio companies like ride-hailing firm Didi and TikTok owner Bytedance can engineer their own listings and on any further price weakness which could crimp profit in the current financial year.

Those companies have strong revenue growth, healthy market share and a clear path to profitability, Govil said.

The group’s trading arm, SB Northstar, is expanding dealmaking this week leading a $1 billion investment in acquisitive e-commerce firm THG.

Reuters

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Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.