Losses at Tech Investor SoftBank due to Chinese Rules

The Chinese government’s approach to tech companies has had consequences for Japanese tech investor SoftBank. That company’s VisionFund suffered a record loss due to lower stock valuations of the companies it invested in, such as the Chinese taxi app Didi Global and online store Alibaba.

 

South Korean e-commerce company Coupang also lost value.

China started last year with a strict approach to large tech companies that were given too much power in the eyes of Beijing. Didi, for example, was turned upside down for collecting too much data from users. Other tech companies had to comply with stricter rules to offer banking services, and online gaming is severely restricted for underage Chinese.

All of this led to a loss in the second quarter of SoftBank’s broken fiscal year of 397 billion yen, or more than 3 billion euros. The telecom division still made a profit, but the value of investments fell by 6.3 billion euros, a more significant decline than at the start of the corona crisis.

SoftBank is an early investor in many companies and usually makes a lot of money when companies go public. However, virtually all companies in which the Japanese investor is involved and went public this year are now in worse shape. In addition, SoftBank no longer reports interests in online store Amazon or the Taiwanese chipmaker TSMC, while it was previously the case. Both companies have increased in value this year.

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