SoftBank looks for $10 billion breather for portfolio companies

Japanese technology conglomerate SoftBank Group has sought an additional $10 billion for its Vision Fund to support its portfolio companies through the Covid-19 pandemic, Bloomberg reported, citing people in the know.

The Tokyo headquartered company will put in $5 million on its own and is in talks with outside investors to commit $5 billion more, the report said. 

With the Covid-19 outbreak, many SoftBank-backed companies’ key services have taken a major hit, casting a shadow on its creditworthiness. Even before the pandemic set in, SoftBank founder Masayoshi Son’s investments into unproven startups was raising investor eyebrows, the Bloomberg report added.

Apart from providing a breather for Vision Fund’s struggling portfolio companies, the new capital infusion will reserve some cash to pay back a coupon attached to the Saudi investment, the report added.

The SoftBank Vision Fund I has put in $80 billion from its $100 billion corpus across 88 investments and has returned $10 billion to its sponsors, the report said.

Its first fund investments include baby products retailer FirstCry, insurance marketplace PolicyBazaar and Ola Electric Mobility. 

Its largest bet in India continues to be the $2.5 billion it pumped into Flipkart in 2017 and exited at a profit when Walmart bought a majority stake in the ecommerce company. SoftBank’s second biggest bet in the country was OYO, where it invested $1.5 billion in November. 

From the second fund, SoftBank has only invested in one startup -- eyewear retailer Lenskart -- so far.