After three consecutive quarters posting multi-billion losses, the SoftBank Vision Fund — the venture capital investment arm of the Japanese multinational conglomerate that’s made hefty bets on real estate tech companies including Compass and Opendoor — returned to profitability, posting a $2.8 billion gain on its investments in the first quarter of fiscal year 2020.
Masayoshi Son Photo credit: Scott Olson/ Getty Images
“The SoftBank Vision Fund performance is improving,” SoftBank CEO Masayoshi Son said during an investor call Monday regarding the company’s earnings.
“Last year [the Vision Fund] posted losses but, as of today, it has returned and turned around $2.8 billion of valuation gain was generated,” Son added.
Son was careful not to forecast a future where the SoftBank Vision Fund stays in the black, due to the uncertainty surrounding COVID-19.
“Of course this is not perfect because the second wave of the COVID-19 pandemic is not over yet,” Son said. “It is not that we can guarantee that the performance of the vision fund will remain positive, in profitability, but it is getting better and recovering”
Since the inception of the Vision Fund, the company has seen 29 of its investments marked up and 48 marked down. Still, the Vision Fund, through June 30, has posted $2 billion in investment market uplift and realized gains.
In the prior quarter, the company posted its worst quarter in company history, but it turned in a net profit of $11.8 billion in the first quarter of fiscal year 2020 due largely in part to selling its stake in Sprint, the telecommunications company.
The Vision Fund’s turnaround is a testament to how well technology companies have fared through the COVID-19 pandemic.
On May 18, when SoftBank reported a record $8.8 billion loss for the fourth quarter of fiscal year 2019, Son predicted that, of the 88 companies the Vision Fund has invested in, 15 could go bankrupt, while 15 could flourish even greater than before as a result of COVID-19 and the related economic struggles. The rest would make it through the crisis without any meaningful gains.
