SoftBank Earned $8 Billion in Q3 as Vision Fund Excels

By Luigi Wewege Monday, February 8, 2021

SoftBank Group, a Tokyo-based investment company, announced it earned ¥1.17 trillion ($11 billion) for the business quarter ending in December.

A person analyzing business data on a screen.

Vision Fund Delivers

The company recorded a profit of ¥3 trillion ($28 billion) for the nine months through December. The quarterly profit of ¥1.17 trillion ($11 billion) crushed analysts’ estimates of ¥171 billion ($1.62 billion).

The company’s Vision Fund, which is believed to be the world's largest technology-focused venture capital (VC) fund with over $100 billion in capital, delivered a great business performance in Q3. Some of the world’s largest equity funds are backing the company, including the sovereign wealth funds of Saudi Arabia and Abu Dhabi.

The business reported that Vision Fund yielded ¥844 billion ($8 billion) in profits in Q3, thanks to a surge in value on some of its investments. It is believed that the food delivery app operator Doordash and an operator of an online real estate marketplace Opendoor — both backed by Vision Fund — delivered handsome profits in the previous quarter.

In particular, the investing business reported that Vision Fund held 82 investments at the end of the quarter with a business valuation of $90 billion. This is nearly $14 billion higher compared with their purchase price of $76.3 billion. Since it was founded, the company has had a Vision Fund of $20.4 billion in gross gains.

The second fund — Vision Fund 2 — saw the business value of 26 investments more than double from $4.3 billion (the purchase price) to $9.3 billion.

This helped the investing business offset losses of ¥113 billion ($1.11 billion) in Sofbank’s other investment arm — SB Northstar, which reported it held equities in value of more than $22 billion at the end of December, with more than a third tied to Amazon shares. In addition, the company’s fund has a stake of $3.28 billion in Facebook, $1.43 billion in PayPal, $1.37 billion in Google’s Alphabet, $1.1 billion in Microsoft, etc.

Masayoshi Son, the chairman and CEO of the investing business, is due to talk to the media in the afternoon and share more insights into SoftBank’s performance in 2020. SoftBank stock price gained 4.5% in Tokyo trading today.

Summary

SoftBank reported a profit of ¥1.17 trillion ($11 billion) for the Q3 and ¥3 trillion ($28 billion) for the nine months through December, thanks to a profit of ¥844 billion ($8 billion) in its flagship Vision Fund.

About the Author


Headshot for author Luigi Wewege

Luigi Wewege is the Senior Vice President, and Head of Private Banking at Caye International Bank. Outside of the bank, he serves as an Instructor at the FinTech School which provides online training courses on the latest technological and innovation developments within the financial services industry. Luigi is also the published author of: The Digital Banking Revolution.

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