Slashing The Cash: SoftBank To Cut Down Funding

Photo by Towfiqu barbhuiya on Unsplash

Japanese investment giant, SoftBank, has been forced to cut down on what it does best – investing in startups. After reporting a huge net loss of $13 Bn in the FY that went by, it will have to tread cautiously and cut startup funding by more than half this fiscal year (2023).

Learning From The Yearnings

Softbank invested more than $46 billion in startups last fiscal year. The conglomerate’s shares also tumbled 8% on Thursday, its lowest in nearly 2 months.

Better Late Than Never 

A year ago, SoftBank, high on its impressive earnings numbers, could not have predicted that it would suffer an annual loss of $13 Bn led by its two Vision Funds. The Vision Funds have been hit hard by the significant drop in tech valuations.

Closer Home

One97 Communications, the parent company of Paytm—another of SoftBank’s portfolio companies—also saw a write-down of $500 million in its investment value.

A Rainy Day

In the earnings call, founder Masayoshi Son took a defensive stance, quipping, “When it rains, you open an umbrella.”

Macro-economic factors such as high inflation, the Russia-Ukraine war, and China’s tech crackdown spooking the global markets is what led to SoftBank to its record lowest.

Too long? Here’s a one-liner: SoftBank suffers a net loss of $13 Bn and may cut its startup investments this fiscal year by more than half.

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