SoftBank’s Vision Fund roars with $4B gain; Arm lockup nears end

The VC ecosystem may still be in a downturn, but SoftBank’s Vision Fund appears to be on the rebound.

The Japanese conglomerate’s tech investment arm reported a $4 billion gain in the last three months of 2023, the division’s largest quarterly return in almost three years.

SoftBank said its strong performance was driven primarily by the increasing valuation of TikTok owner ByteDance—which grew annual revenue 30% to $110 billion in 2023—and the climbing stock prices of its publicly traded investments, including ridehailing service Didi.

This was the third quarter of positive returns for the investment unit, which includes Vision Fund 1, Vision Fund 2 and SoftBank’s Latin America strategy.

In June, SoftBank chief Masayoshi Son said that after a period of refraining from making new investments, he is ready to shift to “offense mode” by backing artificial intelligence companies.

Since then, the capital available for deployment from Vision Fund 2 has decreased from over $10 billion to $6.4 billion, but SoftBank has yet to announce notable investments in AI startups.

Shot in the Arm

SoftBank has yet to realize a windfall from the post-IPO performance of chipmaker Arm, whose share have more than doubled since it debuted in September. The IPO lockup period for the semiconductor giant is set to expire next month. At the time of the IPO, SoftBank owned 90% of the company.

Arm shares surged more than 50% on Thursday after the chip designer announced better-than-expected sales and forecasted strong revenue growth. SoftBank’s stock rose 11% on Thursday in Tokyo.

SoftBank said the Vision Fund portfolio is on sound footing: over 90% of its companies still have more than 12 months of runway. The funds’ startups also raised $8.2 billion in additional capital in 2023.