SoftBank Group has booked a net loss for October-December, as its giant Vision Fund investment unit remained in the red for a fourth quarter in a row while a global tech sell-off battered valuations of its portfolio.
The Vision Fund, which upended the world of technology with its big bets on startups, reported an investment loss of 730.36 billion yen ($5.52 billion) in the latest quarter.
At SoftBank itself, the net loss totalled 783.42 billion yen, compared with a 29.05 billion yen profit a year earlier.
The net loss also marked a sharp turnaround from the 3 trillion yen profit SoftBank reported in the previous quarter, for July-September, when it was buoyed by the sale of some of its stake in China's Alibaba Group Holding.
SoftBank said the Vision Fund unit had significantly curtailed new investments and was continuing to sell some older ones as part of "prudent defensive financial management" amid the challenging market environment.
The results show how rising interest rates, deepening US-China tensions and Russia's invasion of Ukraine have blunted investor appetite for riskier assets, casting a shadow over SoftBank's vast portfolio of startup investments.
The bulk of the loss at the Vision Fund unit came from a steep decline in the valuation of investments in unlisted companies.
The unit had investments in 348 companies as of the end of December, of which 305 are private firms.
Among listed portfolio companies, Indonesian ride hailing company Goto Gojek Tokopedia, South Korean e-commerce platform Coupang and workspace provider WeWork contributed to the loss.
SoftBank's founder and chief executive, Masayoshi Son, invested heavily in artificial intelligence and other high-tech startups through the Vision Fund in recent years, delivering both record profits and heady optimism about future valuations.
He has since been forced to cut back on investment activity and disappointed the market in November when the company did not announce further share buybacks.
The planned listing of British chip designer Arm, one of SoftBank's crown jewels, is now seen as crucial to improving its financial performance and boosting shareholder returns.
SoftBank has said the initial public offering is unlikely to take place during the current business year that ends in March because of market conditions, but it aims to take the company public by the end of calendar 2023.