Softbank

Softbank is relatively little known outside Japan, but has a reputation in its home country as an aggressively operating internet conglomerate. It has a rich history of mastering new areas and crowding out competitors through low prices, new services and unusual advertising.

Aktivs

The holding includes, among other things, telecom operator SoftBank Corp.

Performance indicators

2021: Revenue growth of 11% to 6.2 trillion yen

SoftBank ended fiscal 2021 with a net loss of ¥1,7 trillion ($13.1 billion) against ¥5,1 trillion yen ($46.9 billion) a year earlier. This is a record loss of the company. The company's revenue grew by 11% to ¥6,2 trillion ($48 billion). Such data were released on May 12, 2022.

The Japanese conglomerate lamented inflation, higher key rates across countries and pressure on tech companies in China. SoftBank's two investment funds - Vision Fund 1 and Vision Fund 2 - suffered a net investment loss of almost 3.55 trillion yen ($27.5 billion). The main investments of these funds are associated with IT startups.

SoftBank ends year with record $13.1 loss due to failed investment in IT startups

At an earnings presentation in Tokyo, the Masayosha Son CEO acknowledged the losses and vowed to start taking a more conservative approach. Son added that SoftBank would be more selective in selecting deals, as well as leading stricter criteria for new investments and focusing on boosting returns for its portfolio companies, he added.

The value of the largest assets in SoftBank's portfolio of investment funds has dropped sharply due to tightening monetary policy and raising key rates in different countries, as well as due to pressure from Chinese authorities on the technology sector. Among the most cheaper companies in SoftBank's portfolio is the Chinese conglomerate Didi, which provides taxi aggregator, car sharing and rideshare services. The company's services are DiDi taxi, DiDi car sharing, Hitch, DiDi Bus, DiDi Minibus, DiDi Test Drive, Bike-Sharing.

The list of anti-records also includes the South Korean e-commerce company Coupang. Also, the American food delivery service DoorDash and the Indian payment service Paytm have poor results, Redex Research analyst Kirk Boudry told the newspaper. In addition, SoftBank owns 25% of Alibaba, whose shares are now 30% cheaper than in 2021.^[1]

2020: Biggest losses ever due to Vision Fund

At the end of the fiscal year, which ended at the end of March 2020, SoftBank Group's losses from the company-controlled investment fund Vision Fund reached 1.8 trillion yen (about $16.7 billion). Failed investments in IT projects, problems with WeWork and other assets led to the fact that the entire Japanese group ceased to be profitable.

For the reporting year, SoftBank recorded a net loss of 750 billion yen, while a year earlier net profit was measured at 1.41 trillion yen. These are the company's biggest cash losses since going public in 1994 and its first net losses since the 2005 fiscal year, according to analysts.

The investment fund brought SoftBank a loss of $16.7 billion. Investments in technology turned out to be a failure

Vision Fund, which is considered the world's largest fund for investing in technology startups (its volume exceeds $100 billion), brought cash losses to SoftBank, in particular, due to "a worsening market environment, unsuccessful investments in WeWork and satellite OneWeb, which filed for bankruptcy in March 2020.

In the context of the crisis, the attention of investors switched to SoftBank debt, which has already reached $55 billion, writes the Financial Times. According to the publication, the founder and actual head of SoftBank Group Masayoshi Son pledged banks about 60% of his shares in the company.

In addition, SoftBank put up for sale assets worth up to 4.5 trillion yen ($41 billion) in order to spend the proceeds on debt reduction, bond buybacks and increased cash reserves. The sale of assets will be carried out over the next four quarters, starting in March 2020. At the same time, SoftBank does not specify what exactly will be sold.

On April 13, 2020, when SoftBank reported a loss, the company's shares fell 3.4% by the close of the exchange. Since the beginning of the year, quotes have slipped by 11.7%.^[2]

History

2023

Losses of $6.2 billion after the bankruptcy of coworking operator WeWork

SoftBank suffered losses of $6.2 billion after the bankruptcy of co-working operator WeWork, in which the company previously invested.

SoftBank lost $32 billion due to a failed fund investing in IT projects

The Vision Fund, part of the SoftBank group, at the end of the fiscal year ended March 31, 2023, suffered net losses of 4.31 trillion Japanese yen (approximately $31.97 billion at the exchange rate as of May 11, 2023). For comparison, a year earlier, losses were significantly lower - 2.55 trillion yen. Thus, the loss increased by about 70%. Such data are given in the report published on May 11, 2023. Read more here.

2022: Vision Fund cuts 30% of state amid giant losses

On September 30, 2022, it became known that the Vision Fund, SoftBank's venture capital arm, had begun a massive process of layoffs, cutting at least 30% of its staff worldwide. At least 150 people will be fired. Read more here.

2021

Buying a stake in Roche for $5 billion

In early August 2021, it became known that the Japanese corporation Softbank bought a stake in Roche for $5 billion. We are talking about a package of non-voting shares, while the size of the share is not disclosed. Read more here.

Investing in the FTX Trading crypto exchange

On July 20, 2021, FTX Trading announced that its market value had grown to $18 billion. This happened after a round of financing, thanks to which the cryptocurrency platform managed to attract investments in the amount of $900 million. The fund-raising event involved SoftBank Group Corp. and has become one of the biggest investors for the cryptocurrency exchange. Read more here.

Investing in the FTX Trading crypto exchange

On July 20, 2021, FTX Trading announced that its market value had grown to $18 billion. This happened after a round of financing, thanks to which the cryptocurrency platform managed to attract investments in the amount of $900 million. The fund-raising event involved SoftBank Group Corp. and has become one of the biggest investors for the cryptocurrency exchange. Read more here.

Investing in fintech startup Revolut

In mid-July 2021, the British fintech company Revolut raised $800 million in a new round of funding led by SoftBank and Tiger Global. At the end of the round, Revolut's valuation reached $33 billion, six times more than $5.5 billion in 2020. Read more here.

Buying the Yahoo brand for $1.6 billion from Verizon

In early July 2021, it became known that SoftBank will pay Verizon Communications $1.61 billion for an indefinite license to use trademarks Yahoo and. Yahoo Japan SoftBank subsidiary Z Holdings announced the deal. More. here

Buying 40% of warehouse automation robot developer

In early April 2021, the Japanese company SoftBank announced the acquisition of 40% of the Norwegian developer of robots for automating warehouses AutoStore. The deal amounted to $2.8 billion, the AutoStore estimate - $7.7 billion. The deal is expected to close in April 2021. Read more here.

Investing in telecom company OneWeb LLC

In mid-January 2021, OneWeb raised $400 million in investments, which will allow the company to complete the launch of another 500 satellites required to provide high-quality satellite Internet by 2022. SoftBank Group and Hughes Network Systems invested in OneWeb. Read more here.

2020

Hyundai owns 80% of Boston Dynamics, Softbank - 20%

December 11, 2020 Hyundai Motor Group announced the purchase, in Boston Dynamics which American the manufacturer robots is valued at $1.1 billion. Softbank has 20% of Boston Dynamics remaining. More. here

Boston Dynamics sale to Korean carmaker Hyundai

Korean carmaker Hyundai bought robot manufacturer Boston Dynamics from Japanese SoftBank. This became known on December 10, 2020. More on this here.

Exit from the capital of 22 companies

In mid-November 2020, it became known that the Japanese holding company Softbank withdrew from the capital of more than 20 companies. Among them are such major players as Google, Adobe, Netflix, Microsoft, etc.

According to Softbank's latest financial report, the total value of the company's portfolio at the end of September 2020 amounted to $12.92 billion, for several months before that, the figure was $17.52 billion. Softbank has 4 companies out of 26 left in its portfolio. Softbank sold shares in, Amazon, Alphabet Adobe,, Microsoft, and Netflix Tesla reduced its stake in and the US Nvidia. T-Mobile Japanese the giant also changed positions in and Line Lemonade.

For 3 months, Softbank withdrew from the capital of 22 companies, including Amazon, Tesla, Google, etc.

Speaking about the new investment strategy, Softbank CEO Masayoshi Son noted:

AI companies are transforming into Internet companies, and Internet companies are transforming into AI companies... the boundaries between telecommunications companies, the internet and AI will be blurred.

Son also added:

We started investing in listed companies as a kind of pilot project to improve the effectiveness of our investment results. We also started using derivative products. But derivatives make up only 1% of our assets.

As an investor, Son intends to support a revolution involving artificial intelligence technologies and invest in companies that, regardless of the stage of their development, really have the potential to develop this industry.

Plans to sell Softbank assets in the amount of $41 billion during 2020 became known at the beginning of the year. Masayoshi Son then said that at least $18 billion would be spent on stock buybacks and debt coverage.^[3]

Brightstar sale

In mid-September 2020, SoftBank announced the sale of American mobile phone supplier Brightstar, thereby getting rid of the last telecommunications asset in its investment portfolio. The sale of Brightstar will consolidate SoftBank's transformation into a global investor and asset manager, the Financial Times notes. Read more here.

Nvidia bought ARM for $40 billion

On September 14, 2020, Nvidia announced the acquisition of ARM from Japanese holding SoftBank for $40 billion. Under the terms of the deal, which its participants want to close by the end of March 2022, Nvidia will pay $21.5 billion with its shares and $12 billion with its own funds, including $2 billion immediately after the agreement. Read more here.

Ex-Softbank employee goes to prison for transferring data to Russian diplomat

On July 9, 2020, the Tokyo District Court found Yutaka Araki guilty of stealing secret data from his former employer, Softbank, with the aim of subsequent transfer to a Russian diplomat. Read more here.

Ex-SoftBank employee arrested in Japan in case of espionage for Russia

Japanese police arrested former SoftBank employee Yutaka Araki for stealing confidential information to the operator and transferring it to the Russian authorities. Read more here.

2019

Investing in WeWork more than Bolivia's GDP

On October 23, 2019, the new chairman WeWork of the board of directors, MarceloClaure, sent an email to the company's employees stating that SoftBank had invested $18.5 billion in the largest co-working service, GDP Bolivia which is more than 11.5 million people live in. More. here

Investing in Uber's self-driving car division

On April 19, 2019, Uber announced that it had raised $1 billion in investments for its self-driving car technology division. As a result of the financial deal, which was attended by technology holding Softbank, automaker Toyota and automotive component manufacturer Denso, Uber Advanced Technologies, was valued at $7.25 billion. Read more here.

2018

Investing $500 million in driver behavior analysis software developer Cambridge Mobile Telematics

In December 2018, Cambridge Mobile Telematics announced a $500 million investment from SoftBank, founded by the richest Japanese, Masayoshi Son. The money will be allocated from the Vision Fund, which the Japanese holding has created to invest in technology projects. Read more here.

Investment in the developer of smart windows controlled by the View smartphone

In November 2018, Softbank announced a $1.1 billion investment in smart window developer View through its Vision Fund. The funds raised are aimed at doubling the production of smart windows at a factory in Mississippi (USA), as well as at further developing technology for use in even more futuristic projects. Read more here.

Investment in video surveillance system developer EarthNow

In April 2018, Softbank invested in real-time EarthNow, a real-time video surveillance system developer. Read more here.

2017

Investment in Uber taxi ordering service

Japanese telecommunication conglomerate SoftBank is investing billions in an dollars online taxi ordering service as part of Uber a company-signed agreement. Uber announced the agreement reached on November 12, 2017, but did not disclose details of the deal. More. here

Buying robot developer Boston Dynamics

On June 9, 2017, Softbank Corporation announced the acquisition of robot developer Boston Dynamics. The announcement of this transaction contributed to the rise in buyer quotes by 7.9% to a maximum of 17 years ago. The details are here.

2016: $32.2 billion purchase of chip developer ARM is the largest acquisition in the company's history

On July 18, 2016, SoftBank announced the purchase of ARM Holdings for £24.3 billion ($32.2 billion). It's the biggest acquisition in SoftBank's history.

The value of the deal per ARM share will be £17, up 40% on the share price as of July 15, 2016. After announcing the sale of the British chipmaker, its quotes jumped 45% to the opening of the London Stock Exchange, bringing the company's market capitalization to £7.56 billion. Read more here.

2012

Purchase of American mobile operator Sprint Nextel for $20 billion

In October 2012, Softbank announced its intention to acquire a 70% stake in the US mobile operator Sprint Nextel for $20 billion. If this deal is successfully completed, it will lead to the formation of one of the largest telecommunications operators in the world.

The agreement will allow Softbank, which aggressively promotes its services, to expand its presence in the US market and become a global force, becoming the third largest telecom operator in the world. Sprint, on the other hand, will help to get $8 billion in new capital and noticeably improve its financial situation.

"We are now facing the broadest internal as well as external opportunities of my entire time at Sprint," the company's CEO Dan Hesse noted during a news conference in Tokyo. Sprint is not averse to repeating in its home market an ascent similar to the one made by Softbank, which was previously in third place too and far behind the leaders. "Here we have a lot to learn from them^[4] is^[4].

Masayoshi Son, CEO of Softbank, stated the following:

"When dealing with a complex task, you face a variety of risks. And it will not be easy for us to cope with this task in America. But we believe in our power.'

Son connects his prospects with the experience of building high-speed networks, which the company managed to acquire in Japan. "In America, networks are much slower, less than half the speed we're used to in Japan," he said. "And in ensuring high speed, we see our chance."

Analysts believe the deal will shake up the U.S. mobile market, dominated today by two major operators: AT&T and Verizon Wireless. Softbank, which became a mobile operator just six years ago, has already doubled its subscriber base in Japan, applying aggressive pricing and creative marketing.

The agreement promises a cash injection for Sprint, which, like Softbank, is building its own high-speed network. It makes sense to try to introduce in the United States some technologies that are already successfully used in Japan, for example, specialized payment cards and mobile television. Considerable benefits can be derived from the scale of the new enterprise.

By acquiring Sprint, Softbank is likely to try to achieve savings by further scaling up. The main phone in both companies is the iPhone, both using the Ericsson infrastructure.

Sprint has already secured successful contracts to sell the iPhone, Hesse said. These contracts promise to make a profit over the next few years.

News from Japan said Softbank management intends to use its Sprint position to buy MetroPCS Wireless, which T-Mobile is actively courting at the same time.

Kester Mann, lead analyst at CCS Insight, believes deals between Softbank and Sprint, as well as between T-Mobile and MetroPCS, will be positive for U.S. consumers as the resulting pressure increases on Verizon and AT & T.

Purchase of robot manufacturer Aldebaran Robotics

In 2012 Japanese telecommunication , Softbank holding acquired a French robot manufacturer Aldebaran Robotics. The transaction amount amounted to $100 million. Read more here.

Takeover of a competitor - eAccess, entering second place in the mobile market in Japan

For 2012, Softbank remains the third largest mobile operator in Japan, but in early October an agreement was signed with a small competing company eAccess, after the acquisition of which Softbank will move to second place in the hierarchy in terms of the number of subscribers for $2 billion.

The holding includes (October 2012):

• divisions of large mobile and broadband operators, as well as
• internet assets (specifically Yahoo Japan and Japanese UStream).

Large funds are invested in foreign firms, including, for example, the supplier of social games Zynga and the Chinese holding Alibaba Group.

The Softbank ad starred Brad Pitt and Cameron Diaz, tariff plans explained talking cats to viewers, and the 2012 advertising campaign featured a Japanese family whose head for some unknown reason is a white dog named Otosan. He became famous in Japan.

2008: iPhone pioneer in Japan

Masayoshi Son unveils iPhone in Japan in 2008

The head of the company, Masayoshi, has repeatedly expressed his admiration for Steve Jobs and was the first to introduce the iPhone in Japan in 2008. At that time, the Japanese cell phone market was cooking in its own juice, offering a mass of locally manufactured devices that were not sold abroad, and without any of the foreign models popular throughout the rest of the world.

At first, analysts doubted that the iPhone would appeal to Japanese consumers. However, over time, they recognized that quality goods are created not only within their country, and many local mobile phone manufacturers "entered the tailspin," after which some have not yet recovered.

2006: Purchase of Japanese Vodafone

In 2006, when the Japanese government tried to revive competition in the local telecommunications market, Softbank finally gained the confidence of the authorities to obtain a mobile operator license - in Japan, money alone was never enough for this. However, despite all the attempts of Softbank, more frequencies were not provided to it, so the company instantly seized on the chance when the management of the British operator Vodafone decided to leave the Japanese market. Vodafone appeared in Japan a few years before, having bought the local operator number three, but the European company could not interest the phones of world brands and its services of capricious Japanese subscribers.

Softbank bought Vodafone Japan and in a matter of months the mobile market got a fresh stream of competition. The company went into big debt for this purchase, but it managed to pay them off by selling its stake in Yahoo ^[5] everyone in its ^[5].

2001: DSL Internet Access Market Attack

In 2001, Japan's largest operator, Nippon Telegraph and Telephone (NTT), had to experience a shock. NTT has just launched an Internet access service using DSL technology, when suddenly Softbank crossed its path.

Having gained strength thanks to a series of well-aimed investments in Internet startups, Softbank began to create its own Internet access business, without fear of entering the territory of such a formidable rival as NTT.

DSL service Softbank debuted at tariffs half that of NTT, forcing the largest operator and other competitors to knock down prices too. Thanks to active investments in the most modern technologies, Softbank managed to offer not only less expensive DSL access in a matter of months, but also the fastest. Softbank's blitzkrieg was accompanied by an aggressive marketing campaign: people on the streets who agreed to connect were offered free DSL modems.

There was little competition in the Japanese telecommunications market at the time. Small independent operators usually offered tariffs only slightly lower than NTT, and lower prices in the eyes of the conservative Japanese consumer were never able to overshadow the stability, scale and reliability with which the NTT name was associated. However, Softbank's offer looked too good to turn down.

Since its bold entry into the Japanese DSL market, Softbank has continued in the same vein: the company was not afraid to challenge major players and was accustomed to not being taken seriously at first. Its main tools were tempting prices and new technologies, and the general director Masayoshi Son did not hesitate to make large financial bets.

2000: Purchase of media company Ziff Davis

Among Softbank's first investments are the acquisition of US publisher Ziff Davis and the formation of a joint venture with Robert Murdoch-owned News Corp. in an attempt to dramatically change the landscape of the satellite broadcasting market in Japan. Over the next years, Softbank invested in a series of startups and as of October 2012 owns packages of the largest Chinese Internet companies Renren and Alibaba.

1990s: Buying 37% at Yahoo

By the mid-1990s, the company accelerated the pace by buying a stake in Yahoo, then a start-up company. In a matter of months, Softbank increased its stake in Yahoo to 37% and was able to expand its business thanks to strong growth in the shares of the American company.

1981: Masayoshi Son establishes software distributor and computer magazine publisher

Softbank was founded in 1981 by Masayoshi Son, its permanent leader - a charismatic entrepreneur.

The company began as a software distributor and publisher of computer magazines. Softbank continued this business for the first decade of its existence, but then began to expand.

Notes