SoftBank, the Japanese conglomerate, reported a significant gain of 724.3 billion Japanese yen ($4.6 billion) on its Vision Fund in the fiscal year that ended in March. This marked the first time since 2021 that the flagship tech investment arm was in the black, with the Vision Fund segment posting a profit of 128.2 billion yen for the full fiscal year. This turnaround comes after a 4.3 trillion yen loss the previous year, signaling a positive shift for the tech investment arm.
The gain in the Vision Fund can be attributed to the increase in value of some of SoftBank’s high-profile investments, such as TikTok owner ByteDance and U.S. food delivery firm DoorDash. However, the company did take a hit on other investments, including Chinese ride-hailing firm DiDi and office sharing company WeWork, which filed for Chapter 11 bankruptcy protection last year. Despite some setbacks, the IPO of chip designer Arm last year played a significant role in the gain in the Vision Fund.
For the full year, SoftBank reported an overall loss of 227.6 billion yen, which was narrower than the 970.1 billion yen loss from the previous fiscal year. SoftBank’s net sales for the March quarter were 1.75 trillion yen ($11.3 billion), slightly lower than the expected 1.84 trillion yen. However, the company surprised analysts with a net profit of 231.1 billion yen, surpassing the expected 71.64 billion yen loss.
SoftBank founder Masayoshi Son indicated a shift in strategy for the company in 2023, moving from a defensive stance to an offensive one. This change in approach includes a departure from the cautious investment style towards more aggressive investments. Chief Financial Officer Yoshimitsu Goto mentioned that SoftBank had transitioned from an “Alibaba-centric portfolio” to one focused on artificial intelligence (AI).
SoftBank has been reducing its stake in Alibaba, once a central investment for the company, and is now emphasizing its focus on AI technology. The company sees potential in investing in companies within the AI sector and considers Arm as a crucial part of its portfolio. Goto highlighted that Arm accounted for 47% of assets held by SoftBank at the end of March, compared to just 10% in 2020. This shift showcases SoftBank’s commitment to AI innovation and its importance in the company’s future investments.
Although SoftBank faced challenges with losses in the Vision Fund and setbacks in certain investments, the company’s recent financial performance points towards a recovery. The shift in strategy towards more aggressive investments and a focus on AI technology demonstrates SoftBank’s adaptive approach to the evolving tech landscape. As the company continues to navigate market dynamics and explore new investment opportunities, it will be interesting to see how SoftBank’s Vision Fund evolves in the coming years.