According to the media reports, SoftBank Group Corp.’s new startup bets hit a record low last quarter as valuations continued to slide, chilling an already frosty startup winter.
The firm once participated in $30 billion worth of financing rounds in more than 90 startups in a single quarter, participated in just eight investment rounds totaling $2.1 billion in the three months ending in December.
It was the first time SoftBank’s deal count had dropped into the single digits since the launch of its Vision Fund. SoftBank’s Vision Fund unit invested less than $350 million in startups in the most recent quarter, according to a person familiar with the matter. Over the course of five and a half years, the segment invested more than $144 billion, averaging more than $6 billion per quarter.
SoftBank is not alone in this regard. Tiger Global Management, Sequoia Capital, and Coatue Management have also tightened their spigots following large writedowns in 2022. Deep-pocketed investors have pulled back, putting a halt to billion-dollar funding rounds that had become common in recent years, denying them lucrative exits.
SoftBank’s Vision Funds transformed the venture capital ecosystem by investing billions of dollars in hundreds of startups and compelling other investors to match their big bets. SoftBank and its competitors enabled companies to pursue growth while avoiding the scrutiny of public listings by flooding private markets with easy money. As late-stage investors competed to buy their stakes, early-stage investors could hope for a profitable exit, raising valuations across an opaque sector of investment.
Those bets have soured, as have promises of quick profits through large initial public offerings. SoftBank’s Vision Funds have underperformed the rest of the venture capital sector. One fund is insolvent.