A Japanese investment conglomerate SoftBank is just one of those firms that backed FTX after the startup raised $400 million, valuing the company at a staggering $32 billion. SoftBank, which invested as part of its Vision Fund2, revealed under $100 million in the company a few days ago. SoftBank reportedly cut its investment to zero and told MarketWatch that “it would not face a material markdown in the value of its stake.”
Of course, this isn’t the first time SoftBank has made a mistake in its investment decisions. It famously poured at least $18.5 billion into WeWork, which, along with its co-founder Adam Neumann, plummeted spectacularly.
SoftBank also invested in Katerra, a construction tech startup that raised more than $2 billion before shutting down in 2021. In addition, the firm’s private equity arm loaned $100 million to blood testing company Theranos in 2017.
In addition, it invested $500 million in digital mortgage lender Better.com before agreeing to co-lead the never-materialized SPAC. That company has been embroiled in a number of scandals in the last year. And it is struggling in the face of rising mortgage interest rates, a slowing housing market, and a volatile CEO.
SoftBank’s disclosure about its FTX investment came shortly. After Sequoia Capital reduced the value of its stake in FTX to zero. According to Connie Loizos of TC, “a stake that represented a small portion of Sequoia’s capital. As of last week probably represented among the most significant unrealized gains” in the venture firm’s 50-year history.”
New York Times reported, Pantera Capital and Galois announced losses related to FTX totaling $130 million and $40 million.