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How China’s regulatory crackdown whomped Vision Fund 1’s returns – FiratNews

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SoftBank misplaced some investing preeminence in recent times as names like Tiger and a16z rose to new heights because of rapid-fire dealmaking and keen willingness to prepay for startup development. However as SoftBank continues to chop checks from its Imaginative and prescient Fund 2, we’re nonetheless seeing outcomes trickle in from the time when the Japanese conglomerate was the world’s key startup backer because of its mega-sized Imaginative and prescient Fund 1.

And the current information is lower than stellar.

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SoftBank’s earnings, disclosed immediately, embrace sharp losses from Imaginative and prescient Fund 1 after a number of of its key investments misplaced worth. There was excellent news within the combine as effectively, however reported positive factors had been solely in a position to blunt losses different investments racked up.

Now, notably, we get to talk about Center Japanese cash, Chinese language regulation, the U.S. inventory market and SoftBank on the similar time — they’re all related. It will take a bit of explaining, however, sure, we’re speaking about Didi.

Whoops

Crunchbase information lists three separate investments from SoftBank into Didi, the Chinese language ride-hailing large that famously gained a battle with Uber over its home market. SoftBank’s Imaginative and prescient Fund 1 was, in fact, additionally an investor in Uber. It’s difficult.

The Japanese telco and investing behemoth was a large enough shareholder in Didi on the time of its IPO that FiratNews famous it managed round 21.5% of the ride-hailing firm at that second.

When Didi went public at $14 per share, it was value round $67 billion. Since then, issues have gone poorly for the corporate, which ran afoul of Chinese language regulators, who made it cease accepting new clients and pull its app. Shares of Didi — an organization firmly outdoors the nice graces of the Chinese language Neighborhood Get together — are actually value simply $8.12 per share.

SoftBank reckons that after investing a complete of $12.073 billion into Didi by means of its Imaginative and prescient Fund 1 car, its funding was value simply $7.544 billion as of September 31, 2021, and $7.864 billion as of November 5, 2021. The hole between the corporate’s funding worth and present worth is stark.

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