Son Jeong-ui Bowed His Head... "SoftBank Considering Launch of Vision Fund 3"

[Image source=Reuters Yonhap News]

[Asia Economy Reporter Jeong Hyunjin] Despite large-scale investment losses, Japan's SoftBank is reportedly considering expanding its Vision Fund established for investments.

On the 14th (local time), the Wall Street Journal (WSJ), citing multiple sources, reported that SoftBank is reviewing the launch of a third Vision Fund. It is also said to be considering ways to increase the capital of Vision Fund 2. The scale of investment capital has not been confirmed.

The Vision Fund is the world's largest technology fund, established in 2017 by SoftBank together with Saudi Arabia's Public Investment Fund (PIF) and others, investing $100 billion (approximately 139 trillion KRW). So far, the first and second funds have been launched, investing in over 470 IT companies worldwide.

The reason why the news that SoftBank is considering Vision Fund 3 at this point is drawing attention is that the first and second funds have recently suffered performance deterioration due to stock market crashes and other impacts. SoftBank recorded a record net loss of $23 billion in the second quarter of this year. In response, SoftBank Chairman Masayoshi Son bowed his head, saying, "I am ashamed and regretful."

Vision Fund 1 initially made large profits by investing in Chinese IT companies such as Alibaba, China's largest e-commerce company, ByteDance, the parent company of TikTok, and Didi Chuxing, a Chinese ride-sharing company. However, as Chinese authorities strengthened regulations on domestic IT companies, most of the early profits were returned.

Vision Fund 2 invested in companies such as Klarna, which was considered the most valuable fintech company in Europe, but this year, due to soaring inflation and central bank interest rate hikes, the stock market crashed, causing even greater damage. Vision Fund 2 was launched with $49 billion in capital but is currently experiencing a 19% loss.

Amid the difficulties caused by the performance deterioration of the first and second funds, SoftBank's consideration of Vision Fund 3 is interpreted as reflecting Chairman Son's determination. When announcing the results last month, he stated that investments in IT startups should continue with a long-term perspective and that the scale of investment would also increase.