Son’s comment confirms what the startup ecosystem in India and globally has expected for some time – a
slowdown in big-ticket funding led by macroeconomic factors and the ongoing Ukraine-Russia crisis.
One of his presentation slides, after the company announced its final-quarter results, indicated that ‘defence’ would be the Japanese fund’s strategy for now.
“Peak of investment was Q1 but there was a huge slowdown in Q4. Compared to the amount of investment made last year, I would say the amount of new investment will be half or could be as small as a quarter,” Son said in a post-earnings call in Tokyo, adding that loan-to-value (LTV) levels and investment opportunities will also play a role deciding where to deploy capital.
SoftBank will not only slow its pace of investment but will also spend more time on due diligence and have stricter criteria for new investments, Son said.
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SoftBank’s ‘defence’ strategy comes as its Vision Fund reported a record loss of $26 billion for the year. Tiger Global, another aggressive tech investor, reported a
loss of $17 billion amid the global tech sell-off, The Financial Times reported recently. “We are more conservative when it comes to the pace of new investments. Other private investors are also doing so, I believe,” Son said. “We should be taking a defensive position at the current moment.”
Among its listed portfolio companies, SoftBank reported an unrealised loss of $600 million as of FY22 from its $1.4 billion investment in payments firm Paytm. The company, which made its public market debut last November, has seen its
shares drop more than 70% from the issue price of Rs 2,150. But Policybazaar parent PB Fintech, which went public the same week as Paytm, has reported an unrealised gain of $300 million over the same period on a $100-million investment from SoftBank.
