The Japanese investment giant sold around $14bn worth of listed stocks last quarter, marking a change in its exit-hesitant strategy in order to fund its Vision Fund’s accelerating investments in tech startups.
SoftBank sold an estimated $14bn worth of listed stocks in the last quarter – almost triple that of the previous period, according to Bloomberg estimates based on the group’s quarterly reports and the average share price of each stock during the period.
Of this amount, the group likely raised over $6bn from sales of its stakes in Alphabet Inc, Facebook Inc, Salesforce.com Inc, and Netflix Inc in the last quarter, and about $4bn from its partial sales of holdings in Uber and DoorDash.
In the last quarter, the Japanese investment group ramped up dealmaking through its Vision Fund investment arm at a considerable pace, injecting $15bn into at least 50 startups.
The funds had to come from somewhere, and although chief executive Masayoshi Son is traditionally hesitant to exit the firm’s investments and said in the last earnings call that the company wanted to avoid selling stakes in startups post-IPO, stock liquidation financed around half of this rapid dealmaking.
Son also injected $38bn into its Vision Fund 2 during the period.
It comes a week after Son said SoftBank will take a “wait and see” approach and pause its investments in Chinese tech startups until Beijing’s current regulatory crackdown on the sector calms.
SoftBank’s Vision Fund division recorded a 236bn yen ($2.14bn) profit in the first quarter, down from a record $8bn in May, as its gains from various IPOs were dragged down by falling valuations after Beijing’s regulatory crackdowns.
Although the China crackdown affected returns expectations, Vision Fund Chief Financial Officer Navneet Govil said, “our broader thesis in China is unchanged: It’s still a large, growing and compelling economic opportunity.”
Meanwhile, SoftBank tries to shed some of its cumbersome stake in Chinese e-commerce giant Alibaba – which represents around 39 per cent of the group’s asset value.
SoftBank’s dealmaking frenzy is part of a wider trend seen in the first half of the year as economies emerge from the pandemic.
Global venture capital investment is on track for an all-time record by the end of the year, after more than €264bn was invested worldwide in the first half, according to Dealroom data. This was more than double the €114bn invested in the same period in 2020.