Despite Record Losses, SoftBank Continues To Investment In Katerra And Didi

Japanese telecom giant and startup benefactor SoftBank has been led by the country's richest man, Masayoshi Son, whose investments through the SoftBank Group and its $100 billion SoftBank Vision Fund have continued to make headlines.

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SoftBank has backed and acquired several established tech firms, including Uber, Nvidia, ARM, WeWork, and Slack. It has also backed other lesser-known startups, like Indian e-commerce company Paytm and farming startup Plenty.

In 2019, the company announced it was launching a second fund to invest in tech companies developing artificial intelligence technologies around the world, called Vision Fund 2. At one point it had financing commitments of $108 billion.

However, the prospects for SoftBank's second Vision Fund is in peril following the first fund recording record losses of $18 billion. Dealing with business missteps along with the downturn caused by the coronavirus pandemic, SoftBank has had to write down the valuations of 47 companies in the fund, including startups like WeWork, Uber, and Oyo. Despite this, the company has recorded wins across healthtech ventures and enterprise-focused deals.

In May, the technology-driven offsite construction company, Katerra secured $200 million in funding from SoftBank Group's Vision Fund. This new round of funding brings Katerra's total capital raised to over $2 billion, and much of it is from SoftBank. Though, Katerra declined to disclose SoftBank's stake.

This isn't the only investment the company has made. Didi - dubbed the Uber of China - announced it raised $500 million in a funding round led by existing investors, SoftBank. The proceeds came from its Vision Fund 2.

The company has revealed its Vision Fund is planning extensive cuts to its workforce following the reported losses. The layoffs could affect around 10% of the fund's workforce, which is roughly 500, two anonymous sources told by Bloomberg. Headquartered in London, The Vision Fund also has operations in Tokyo and California.

SoftBank published an operating loss of 1.36 trillion yen, or $12.7 billion, in the fiscal year that ended March 31. This was the firm's first annual loss in 15 years. In comparison, the previous year it reported a profit of $19.6 billion and a net income loss of $894 million.