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PitchBook News - The end of an era for SoftBank

Plus: Chelsea FC's record-breaking sale; the latest data on VC valuations; Europe's drop in exits & more
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The Weekend Pitch
May 15, 2022
Presented by DealCloud
(Tomohiro Ohsumi/Getty Images)
In recent years, SoftBank has been something of a totem for venture capital largesse. The Japanese investment juggernaut headed by Masayoshi Son has been, by some margin, VC's most prolific investor, backing iconic startup success stories—and some of the biggest failures.

Now, things are turning sour indeed. On Thursday, we learned that SoftBank's Vision Fund posted a record investment loss of 3.5 trillion yen (about $27 billion) for its latest fiscal year. The overall loss for the company totaled 2.1 trillion yen. Its stock price, meanwhile, has plummeted, losing around half of its value since March.

Yet these results are not all that surprising. SoftBank had a brutal start to the year, its holdings ravaged by a toxic combination of falling tech stocks, rising inflation, interest rate hikes, a ruthless crackdown on the tech sector by Beijing authorities, and war in Europe.

Welcome back to The Weekend Pitch. I'm Andrew Woodman, and you can reach me at andrew.woodman@pitchbook.com or on Twitter at @adwoodman.

SoftBank can survive this latest humbling episode, but it certainly feels like we are at the end of an era, not just for the company, but also for the VC industry it has championed.
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Quote/Unquote
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"You might see more companies that might be viable targets for private equity buyers that weren't targets before."

—Jeff Cohen, global head of the leveraged finance group at Credit Suisse Group, on the potential rise in take-private deals amid market volatility.

Deal Flow
The angel & seed market has launched into 2022 riding the wave of momentum created over the past couple of years.

Deal sizes have remained strong in the face of strong headwinds—among them rising interest rates, high inflation and geopolitical tension—with the median size increasing for both deal types in Q1, according to our latest US VC Valuations Report.

Did you know ...
Chelsea FC's Romelu Lukaku (Clive Brunskill/Getty Images)
... That at £4.25 billion (about $5.23 billion), the price tag for Chelsea FC is the highest ever for a sports franchise?

A consortium led by Todd Boehly and Clearlake Capital struck a deal last week to buy the club from Roman Abramovich, after the UK imposed sanctions on the Russian oligarch.

Here's a breakdown of the historic sale.

Datapoints
(MirageC/Getty Images)
After a record-breaking 2021, European venture-backed exit activity fell substantially in the first three months of this year.

Total exit value in Q1 reached €7.7 billion (roughly $8.1 billion), spread across an estimated 296 deals. If the current pace for exit activity continues, 2022 will fall far short of last year's high.
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This edition of The Weekend Pitch was written by Andrew Woodman and Ryan Prete. It was edited by Alexander Davis, Chris Noble and Kate Rainey.

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