SoftBank has today announced that it expects to lose up to £13.3bn on the tech firms it has invested in through its international start-up fund.
This will be the firm’s first loss in 15 years.
The Japanese conglomerate is the world’s biggest technology investor firm, and has been funding firms over the last decade through £88bn ($100bn) ‘Vision Fund’.
Softbank has blamed the losses on the ongoing coronavirus outbreak which has caused markets across the world to deteriorate.
The company has stakes in some high-profile tech firms including WeWork, OneWeb and Sprint.
Commenting on news that Softbank expects to lose £13.3bn on technology firms through its Vision Fund, Professor John Colley, Associate Dean of Warwick Business School, said: “Softbank has a very skewed investment portfolio into industries which have been hit particularly hard by the virus.
“It is hugely overweight in taxi ride-hailing shares including Uber, Didi Chuxing, and Grab. It has also invested heavily in Oyo, the hotel business and WeWork which is office sharing.
“In truth, Softbank thought it was investing in technology businesses. In reality it was investing in office sharing, hotels and the taxi industry. The difference is enormous. These industries are typically narrow margin and highly competitive due to low entry barriers, and always very exposed to recessions and economic shocks, as Softbank is discovering.”