PitchBook News - SoftBank's Vision Fund conundrum

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The Weekend Pitch

May 19, 2024

Presented by Masterworks

(Jenna O’Malley/PitchBook News)

When SoftBank announced its earnings for the 2023 financial year, there were plenty of reasons for the Japanese conglomerate to be happy.

The group reported its second consecutive quarter of profit, and net asset value—which SoftBank claims as its most important metric—almost doubled from the previous financial year to a record 27.8 trillion Japanese yen (around $180 billion). The success of chipmaker Arm's IPO has helped to considerably narrow SoftBank's full-year loss.

But there remains a sore spot for SoftBank in the form of its Vision Funds. The segment generated a loss of 167.3 billion yen for the full fiscal year, excluding the proceeds from Arm’s IPO. In the last quarter of the period, the loss amounted to 389 billion yen.

Together, the Vision Funds 1 and 2 have a cumulative investment loss of $1.4 billion as of the last quarter of FY2023, with SVF2 in particular dragging down performance. Its loss since inception now stands at $19.3 billion. The fair value of investments for both vehicles is also down—0.4% for SVF1 and 1.1% for SVF2 from the previous quarter-end.

Although the Vision Funds' results aren’t as devastatingly terrible as they were in the 2022 fiscal year, they still leave much to be desired. The question now is what is next for the Vision Funds and whether they have a role to play as SoftBank expands its focus to AI technology.

This is The Weekend Pitch, and I'm Leah Hodgson. You can reach me at leah.hodgson@pitchbook.com or on X @LeahFHodgson.

Trivia

Crypto, after a bruising year and a half, appears to be on the mend, with Q1 2024 seeing the first quarterly increase in deal value since 2021, according to PitchBook’s new Emerging Tech Research on the sector. How much deal value was generated in Q1 2024?

A) $1.8 billion
B) $2.9 billion
C) $3.1 billion
D) $2.4 billion

Find your answer at the bottom of The Weekend Pitch!

As mid-market fintech M&A heats up, we've nominated top PE targets

(PM Images/Getty Images)

PE has its sights locked on middle-market fintech and payments buyouts for the growth, margins and stability. This has continued to fuel the comeback for enterprise fintech M&A in recent quarters. Our latest analyst note includes a deal-sourcing resource for middle-market firms.

In Q1, companies offering industry-specific payments tools paired with workflow software flew off the shelves.

As corporations plan for a soft landing, large corporate M&A has been on the rise.

read it now

Share:

How generative AI could revolutionize the IT industry

(Primeimages/Getty Images)

As everyone keeps an eye on Databricks' road to IPO, infrastructure SaaS is poised for a transformation.

Generative AI-powered solutions in network operations, such as those being developed by startups like Sequoia-backed BigPanda and Silver Lake-backed ScienceLogic, have the potential to overhaul IT functions of major organizations, according to our latest Emerging Tech Research on the area.

The DevOps sector logged 108% quarter-over-quarter growth in VC deal value in the first quarter. Kleiner Perkins-backed Glean, Salesforce Ventures-backed Together and Net Friedman-backed Magic all raised funding—and are spearheading the bleeding edge of generative AI integration in DevOps.

read the preview

Share:

European VC valuations rise again

(Atakan/Getty Images)

The outlook for European VC valuations is turning more positive this year, as the median price tag rebounded across nearly all stages in the first quarter.

Only the median late-stage valuation saw a dip in Q1, according to our latest European VC Valuations Report, while deal sizes have swelled across the board. The percentage of down rounds has also stabilized, offering further good news for Europe's startup ecosystem. Median valuations for VC-backed exits are one of the weak points, but remain resilient.

read the report

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Quote/Unquote

(Suppawat Subcharoensuk/Getty Images)

“To me this was a true sci-fi moment for technology.”

—Daniel Chesley, a principal at seed-stage enterprise fund Work-Bench, reacting to OpenAI unveiling its latest flagship model GPT-4o with a heavy focus on speech and video.

Stay tuned

Keep an eye out for these insights and research reports coming out this week:

Q1 2024 Clean Energy Tech Report
2024 France Private Capital Breakdown
Q1 2024 Global Private Market Fundraising Report
Q1 2024 AI & ML Report

Trivia

Answer: D)

In Q1 2024, $2.4 billion was generated in deal value within the crypto space. You can read more about the space and what’s driving renewed interest in this report.

This edition of The Weekend Pitch was written by Leah Hodgson and Jacob Robbins. It was edited by Andrew Woodman and Ron Prichard.

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PitchBook News - SoftBank's Vision Fund conundrum

Trivia

Quote/Unquote

Stay tuned

Trivia

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Valuations can be deceiving

Will generative AI revolutionize IT?

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Ranking Q1's most active investors

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