Just now, the most tragic scene in venture capital history happened -
Today (May 12) afternoon, Masayoshi Son announced the latest financial report of SoftBank Group in Tokyo, Japan: As of March 31, SoftBank Group's net loss in fiscal year 2021 was 1.7 trillion yen (approximately RMB 90 billion). Even more stunning is that Vision Fund's net loss in fiscal year 2021 was as high as 2.64 trillion yen (approximately RMB 140 billion).
Even if it is globally viewed, this is the biggest loss in venture capital history, and it is unique.
face was solemn, and Masayoshi Son announced that he would officially slow down investment: SoftBank will adopt the conservative investment pace of . He also gave a specific number: investment will be halved or a quarter of this year compared to last year.
, the world's largest venture capital agency, is facing the most difficult moment. The market value of the project has shrunk, fundraising has been difficult, and investment has collectively slowed down - what Masayoshi Son is currently facing is also what most VC/PEs in China are currently experiencing.
The biggest hole in history: Vision Fund loses 140 billion
Sun Masayoshi announced the suspension of investment in
Success and failure are Vision Fund.
Recalling a year ago, Masayoshi Son proudly announced in Tokyo that the net profit attributable to shareholders of SoftBank's parent company was 4.9879 trillion yen (approximately RMB 294.8 billion), setting a record for the highest Japanese listed company. "SoftBank Group achieved profit in one quarter, which has exceeded any Japanese company in history."
Among them, the largest return came from the Korean version of Alibaba Coupang. On March 11, 2021, Coupang was successfully listed on New York Stock Exchange , and the stock price of rose by 40% on the first day of listing. SoftBank, as the largest shareholder of Coupang, naturally made a fortune. This is another classic investment from Masayoshi Son after Alibaba, earning a book return of US$24.5 billion.
However, good times didn't last long. Coupang's stock price has been falling all the way after it went public, with a drop of astonishing 40% in the first quarter of this year. Its current market value is only US$17 billion, which also shrank SoftBank's original investment income to less than US$6 billion.
such scenes also appeared in other celebrity projects: In the fourth fiscal quarter (January to March 2022), the share price of Singapore’s online ride-hailing service giant Grab fell 51%, and the share price of Indian digital payment startup Paytm fell 60%, which also led to the Vision Fund recording losses of US$2.4 billion and US$1.3 billion respectively... The stock prices of almost all participating companies are already below the issue price and have suffered heavy losses.
This afternoon, Masayoshi Son revealed a tragic data at the financial report meeting: As of March 31, Vision Fund's net loss in fiscal year 2021 was 2.64 trillion yen, or approximately RMB 140 billion.
Affected by this, SoftBank Group's net loss in fiscal year 2021 was 1.7 trillion yen (approximately RMB 89.328 billion), which is the biggest hole in global venture capital history.
Sun and his team have already smelled the danger. According to Bloomberg, a managing partner of SoftBank Vision Fund also expressed the same attitude as Masayoshi Son at a meeting in Los Angeles in March this year: plans to reduce investment in . The situation is stronger than others, and this investment madman rarely announces his slump.
Masayoshi Son and SoftBank have always been regarded as one of the weather vanes of the primary market. He once said: "Spring will come sooner or later, we will continue to sow, and the seeds are growing steadily."
However, today, Son announced that SoftBank will adopt a conservative investment pace - compared with last year, the investment amount this year will be halved or a quarter.
Ali accounts for 22% of the net asset value
Softbank sells out tears and urgently cashes out
Cash to survive, becoming the most urgent task of Masayoshi Son at the moment.
It is reported that SoftBank is working hard to raise cash and is evaluating assets that may be liquidated.If everything went well, Masayoshi Son would receive a huge sum of $66 billion from Nvidia, but the final acquisition of ARM failed in February this year.
is out of my mind. SoftBank quickly started preparations for ARM's independent IPO, saying that it may launch ARM on Nasdaq by March 2023. It is reported that SoftBank is planning to choose Goldman Sachs as the lead underwriter of ARM's independent IPO, whose valuation may be as high as US$60 billion (approximately RMB 381.7 billion). Masayoshi Son just said that if the market is not good enough when ARM prepares for IPO, it may wait and postpone it for another 3-6 months.
Recalling in 2016, Masayoshi Son spent $32 billion to acquire ARM, creating the most sensational acquisition case of that year. At that time, he said that ARM will be the future of SoftBank Group. Unexpectedly, ARM has now become the hottest potato in Masayoshi Son's hands.
At the same time, SoftBank withdrew from the autonomous driving unicorn Cruise. General Motors announced on March 19 that it would acquire stake in , its subsidiary Cruise, for $2.1 billion, to expand GM's stake in Cruise to 80%. GM also said it would add $1.35 billion in Cruise to replace the promise made by SoftBank Vision Fund in 2018.
In this transaction, SoftShanghai made a little money. According to data, SoftBank previously invested about US$1.2 billion in Cruise, and selling US$2.1 billion is equivalent to making US$900 million (approximately RMB 5.7 billion). As a trader who raised Cruise's valuation to $30 billion, Son has no choice but to give up the autonomous driving company second only to Google Waymo.
In mid-April this year, U.S. Securities and Exchange Commission documents show that SoftBank Vision Fund sold 50 million Coupang's shares, with a total value of $1 billion. This is the second time in at least a few months that SoftBank has sold shares of the Korean e-commerce giant . The price of the shares sold was only US$20.87 per share, which was nearly 30% lower than the issue price of Coupang in September last year, which was a big sale.
Looking back on his past investment career, Masayoshi Son wrote a counterattack legend countless times, and the Chinese people are most familiar with his classic battle against Alibaba. Today, Masayoshi Son also revealed the latest figures: Alibaba accounts for 22% of SoftBank’s net asset value and 49% of Vision Fund.
But there are also many painful lessons. The failure of investment in WeWork was an unforgettable memory of Masayoshi Son. For this reason, he publicly apologized for the first time at SoftBank's annual shareholders' meeting in 2020; and the bankruptcy of Greenhill Capital, the invested project, also made Masayoshi Son bow his head and admit his mistake again.
I don’t know how long it will take for Masayoshi Son to rush out of the blizzard this time.
Sun Masayoshi is not an isolated case
Domestic VC brake: When the valuation drops
Coincidentally, a similar scene for Masayoshi Son is also being staged in the domestic venture capital circle.
Let’s first look at two sets of data -
The market raised new in the first quarter of this year in the market. The number of funds totaled 1,374, of which the situation of foreign currency funds is worrying. In the first quarter of this year, a new round of fundraising occurred in 20 foreign currency funds, with falling by 57.4% year-on-year compared with ; the amount of fundraising was disclosed was about 31.51 billion yuan, a year-on-year decrease of by 62.6%.
In other words, US dollar fundraising decreased by about 60% in the first quarter of this year, an unprecedented example.
investment side also slowed down - the domestic equity investment market slowed down significantly in the first quarter of this year - a total of 2,155 investments occurred, decreased by 27.5% year-on-year ; the disclosed investment amount was RMB 196.822 billion, and decreased by 47.1% year-on-year , which can be said to be halved. Just like Masayoshi Son, domestic VC/PE brakes.
There are many reasons behind this, and the sharp drop in Chinese stocks listed in this year has become an indescribable pain for VC/PE, which has greatly affected the confidence of the primary market, especially the US dollar funds.Data shows that as of March 11 this year, there were 271 Chinese stocks listed in the United States, with a total market value of approximately US$972.4 billion, falling below the trillion US dollar mark.
is not just Chinese stocks, but A shares and Hong Kong stock markets have also seen a rare wave of breaking the issue price this year. For example, the AI unicorn Geling Deep Pupil , which is highly anticipated, officially landed on Science and Technology Innovation Board in March this year, but broke the issue price at the opening of , and its latest market value is only 4.8 billion yuan, which is really sad.
As for new consumption, it is a hardest hit area. Take Naixue’s Tea as an example. The market value of the issuance when it was listed in June last year reached HK$34 billion, and has been declining since then. As of now, Naixue’s Tea’s latest market value is HK$7.8 billion, but when the C round of raised , its valuation had exceeded RMB 10 billion.
Cherish the bullets in your hand - this is a consensus reached by VC/PE in a silent manner. When the primary market reached a cold cyclical trough, the dilemma of fundraising and exit quickly spread to the investment side, and everyone slowed down.
Previously, an investor who did not want to be named reported to the investment community that the boss directly called for a halt to existing investment, "I have been doing research for this period of time, and there is no opportunity for new projects to be on the investment committee at all." From 2022 to the present four months, no project of the company has passed the meeting, and it has not opened for a whole quarter. Cases like
are not uncommon. It is reported that Tencent Investment has also begun to limit the speed of operation this year, "If you can, don't take action, you won't take action" . What's more, a US dollar fund tycoon who has been in the industry for decades revealed to his friends around him that he, who is already financially free, decided to take this opportunity to retire.
As Liu Xiaodan, founder of Chenyi Investment, admitted at the LP conference a few days ago, in the context of the drastic adjustment of capital market , it is inevitable that China investment institutions will be reshuffled.
No winter will not pass, and no spring will not come. I just don’t know how long this cold winter will last.
