Introduction: SoftBank is a Japanese multinational conglomerate that is known for its investments in tech startups through its Vision Fund.
However, recent data from Crunchbase has shown that not all of the fund’s investments have been successful. Here are some highlights:
Analysis:
1. Public market disappointments – Several SoftBank-backed public companies are trading far below their initial offering prices or peak private valuations.
◦ WeWork has lost over 90% of its value and has a current market cap of around $170 million.
◦ View, a smart glass maker, has been an exceptionally poor performer with shares hovering at less than 20 cents each.
2. Shuttered or bankrupt – Several heavily funded companies have closed their doors or filed for bankruptcy.
◦ Boston-based Pear Therapeutics filed for Chapter 11 bankruptcy protection after struggling to get insurers to pay for its offerings.
3. Poor exits – Some Vision Fund big bets have sold to acquirers at steep discounts to their prior valuations.
◦ Fair, a vehicle leasing platform, sold last year to Shift in a deal valued at less than $20 million.
◦ Berkshire Grey, a maker of robotic systems for warehouse automation was taken private by SoftBank at a $375 million valuation.
Implications: While there have been successes such as Uber, Slack and DoorDash, this analysis shows that not all of SoftBank’s investments through the Vision Fund have been successful.
It’s important to note that much of the portfolio is still ambiguous and it remains unclear if cost-cutting measures will put these companies in a better position for long-term viability.
Conclusion: With heavily funded companies experiencing layoffs and cost cuts, it is important to keep an eye on the successes and failures of investors like SoftBank in order to make informed decisions when it comes to investing in tech startups.
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