SoftBank changes its investment strategy after a series of setbacks

After facing a setback from its two most celebrated investments in recent times - Uber and WeWork - the Japanese conglomerate SoftBank has been finding a hard time to raise investment for its second Vision Fund.

It plans to invest $2-4 billion in India, which happens to be one of its key markets, but the recent situation has cast uncertainty over its investment plans.

SoftBank has not been able to pour in money despite signing a term sheet with several start-ups. Two of its major investment announcements this year in Lenskart and Delhivery have been on hold for more than six months despite getting a green signal from its Indian and global team. The second Vision Fund does not have sufficient capital, and so comes the delay.

SoftBank Vision Fund 1 period ended in September. It reported a loss of $6.4 billion, while the inaugural Vision Fund reported an operating loss of $9 billion for the quarter ended Sept 30.

The losses are largely attributed to Softbank’s huge bet on WeWork, which reduced its valuation to $10 billion from a $47 billion, and Uber, which is now trading much below its price post IPO.

All this has also led to a change in strategy for the Japanese conglomerate. In the past one year, SoftBank has also tweaked its existing strategy for India. Largely known for investing in hefty rounds with hefty amounts, the investment firm now looks to invest relatively smaller amounts of $100-200 million.

Apart from investing through SoftBank Vision Fund, the firm had planned to use its venture capital arm SoftBank Ventures Asia to place early-stage bets.