(FT)
This is of significance as SoftBank’s Vision Fund is one of the largest and most influential tech investors in the world.
Son’s remark is also an indication of the broader correction in valuation of technology companies–both in private and public markets.
According to the FT report, Son’s comments come at a time when the Japanese investor is ‘pushing to raise cash and is evaluating assets that could be liquidated’
The report quoted an unnamed individual from SoftBank’ China team saying valuations of its Chinese companies listed overseas have collapsed. “We don’t expect a turnaround anytime soon,” this person said in the FT report. Following China’s crackdown on its top tech companies, Son had said he is pausing Chinese investments and will wait for the situation to stabilise.
Son’s top lieutenant Rajeev Misra, CEO of SB Investment Advisors who heads SoftBank Vision Fund,
also told ET earlier this month that private financing will be limited this year unlike 2021 and 2020. “ I can see the change already today between December and January.. So if a company is raising early-stage $50-$150 million, and you have to write $20 million cheques, there is a lot of crowd willing to do that. But if the company is trying to raise $250 or $500 million, they’re struggling to find the lead investor who will come in with $100-$150 million, Misra said in an interview at the ET Global Business Summit. According to him, he had already seen certain investors back out after verbal commitments in the last few weeks.
Discover the stories of your interest
For the full interview click here
Echoing the same sentiment,
a Bloomberg report on March 29 quoted marquee Silicon Valley fund Sequoia Capital’s managing partner Doug Leone saying that the current tech slowdown has caused late-stage venture capital funds to pull back activity.’
Rising interest rates in the US and the recent Russia Ukraine war have added to the headwinds. In India, new-age companies like Zomato, Nykaa, Paytm and others are trading much lower than their listing prices. Paytm, the wort hit among the lot, lost around 75% of its value since its IPO listing. The cautious sentiment is expected to reflect in private funding deals here.
