SoftBank Cuts Back Spending, Leaving Startups Desperate for Cash

Apr 25, 2022

SoftBank Cuts Back Spending, Leaving Startups Desperate for Cash

According to people familiar with the matter, Light, which is backed by SoftBank Group Corp., has been unable to raise additional funding after the world's largest tech investor declined to invest more.

Light was injected with $121 million from SoftBank's first Vision Fund in 2018. The company owned about 30% of the startup back then. SoftBank's continuing support for the cash-strapped startup is vital. The startup had been investing millions into self-driving technology with SoftBank's support.

Affected by the decline in tech valuations, SoftBank is walking away from some of its loss-making portfolio companies to adhere to stricter investment standards, according to the sources, who asked not to be identified because the matter was not in the public domain. There are 300+ companies in the portfolio of the two Vision Funds, many of which are losing money.

An investment firm in Japan offered to help Light if it could find another investor to lead the next round, one of the sources said. According to the source, other investors were leery of investing in the company since its biggest backer offered only a token sum. Startups based in Redwood City, California, have contracted a consulting firm to consider various options, including winding down operations.

"Their wallets are tighter than ever before," the insider said.

A spokesperson for Vision Fund and Light's CEO Dave Grannan did not respond to a request for comment.

With the deployment of billions of dollars from Saudi Arabia and Abu Dhabi sovereign wealth funds into startups, SoftBank's Vision Fund is rewriting the rules of venture capital, a radical shift from its past freewheeling largess.

For a long time, Masayoshi Son, SoftBank's founder and CEO, was convincing startup founders to accept Vision Fund money by encouraging them to think bigger and promising to support them in their expansion efforts. If a founder wanted to accelerate the growth of their company, he would often invest more money than they needed.

When the billionaire approved Light's investment, he made it clear that his interest was based on the startup's ability to adapt its depth-sensing imaging technology for self-driving vehicles - something Light's founders had never contemplated before.

The man saw the value in autonomous driving, Grannan told Bloomberg in 2018. "Masa was convinced the technology could be a game changer."

Following the initial investment from the Vision Fund, Light was introduced to other portfolio companies in the automotive technology sector, including self-driving startup Cruise LLC and ride-hailing firms Uber Technologies Inc. and Grab Holdings. During a drastic pivot to meet Son's demands, Light laid off about half its staff and eliminated its original smartphone-camera team.

The self-driving startup struggled to win quick contracts due to the long commercialization time for its technologies.

In the early years following the launch of the Vision Fund in 2017, SoftBank raised the valuation of startups such as WeWork and Uber by billions of dollars, adhering to a minimum budget of $100 million per deal.

Despite winning over hundreds of entrepreneurs with its big bet on long-term growth, SoftBank was exposed to enormous volatility in tech shares and mounting debt, all the while its pot of new share sales was drying up.

Next month, Redex Research analyst Kirk Boodry estimates, the company may report its biggest quarterly loss ever due to the plunging value of its most valuable investments, including Coupang Inc. in South Korea and Didi Global in China.

Another source familiar with the talks between SoftBank and Light noted that Light's investment now makes up less than 0.1% of the Vision Fund's total portfolio. The Vision Fund, whose stake in Cruise was sold last month, has become less interested in self-driving technology over time.

On an earnings call in February, Son stated that the Vision Fund would invest, but at a slower pace because publicly traded companies' share prices were crashing amid lofty valuations for privately held companies.

According to him, many venture capital firms, in addition to his, are renegotiating terms with companies seeking funding. „We are considering the entire picture, while operating within the limits of our available cash.“

Subscribe Our Newsletter

These Big Cap Stocks Are Moving the Most Today: From FedEx to Amazon And More.

Milena

These Big Cap Stocks Are Moving the Most Today: From FedEx to Amazon And More.

Big cap stocks as FedEx, the delivery behemoth, gives disappointing projections, while Tesla CEO Elon Musk says the electric-vehicle company will expand into India as soon as humanly feasible.

Stocks
B2BROKER x FXCubic partnership

Alex

Breaking Barriers: B2BROKER and FXCubic Partner to Expand Market Access for Brokers

B2BROKER partners with FXCubic to redefine liquidity management, delivering seamless integration, deeper market liquidity, and enhanced trade execution.

Companies
Get the ultimate solution: B2BinPay Get the ultimate solution: B2BinPay
Sponsored
Anna

What is The Difference Between Liquidity Provider and Liquidity Aggregator?
Forex is a platform where everyone, from a huge corporation to a beginner trader, can start making a profit from their funds. The Forex market is so gainful, thanks to its exceptionally high liquidity.

discover
How Does the Cryptocurrency Exchange Business Work?

Liquidity Provider

How Does the Cryptocurrency Exchange Business Work?

Unlike any other moment in contemporary history, the universal adoption of Bitcoin has been unparalleled. There has been a rapid growth in the number of firms that specialize in bitcoin.

Crypto Exchange Business
Contact us bg

Contact Us

Contact the Liquidity Provider
for any questions and advertising inquiries

    Please fill out this contact form to get in touch with us

    / 3000

    By clicking “Get in touch” button, you agree to the privacy policy

    Successful!
    Thank you for your request.
    We will contact you shortly.
    Close

    Сonstantine

    Internal vs External Range Liquidity In ICT Trading Explained

    Internal vs External Range Liquidity In ICT Trading

    Constantine

    Portfolio Backtesting — Tools, Metrics, and Methods Explained

    Portfolio Backtesting

    Сonstantine

    ICT Trading Explained: Smart Money Concepts, Tools and Setups

    ICT Trading Explained

    Сonstantine

    CFD Trading Strategies: A Practical Guide to Risk and Execution

    CFD Trading Strategies

    Alexander

    What is a Fair Value Gap? A Guide to Trading Market Imbalances

    What is Fair Value Gap

    Vitaliy

    Triangle Patterns in Trading: Mastering Ascending, Descending & Symmetrical Strategies for Maximum Profit

    Triangle Patterns in Trading: Ascending, Descending & Symmetrical Guide

    Alexander

    What Is COTI? Payments, Token & Price Prediction

    What is a COTI coin

    Constantine

    Best Copy Trading Software in 2025

    Best Copy Trading Software in 2025

    Alex

    What Is an AI Agent? The Future of Finance Explained

    AI Agent Explained

    Constantine

    How to Start a Liquidity Provider Business?

    How to Start a Liquidity Provider Business

    Constantine

    How to Start a White Label Brokerage?

    How to start a white label brokerage

    Constantine

    How to Start a Multi-Asset Brokerage?

    How to Start a Multi-Asset Brokerage

    Hazem

    Crypto Ransomware – How They Happen and How to Avoid Them

    Crypto ransomware explained

    Constantine

    Best Web3 Browsers in 2025

    Best Web3 Browsers

    Constantine

    Best DAO Projects in 2025

    Best DAO projects in 2025

    Alexander

    Crypto Nodes That Pay: Your 2025 Guide to Top Passive Income Opportunities in Crypto

    crypto nodes that pay

    Alex

    Pi Network: Scam or Groundbreaking Crypto? The Full Analysis

    Pi Network Explained

    Constantine

    Triple Net Lease: Meaning, Benefits, and Strategies Explained

    Triple Net Lease

    Constantine

    Hanging Man Pattern: How to Identify and Trade It Effectively

    Hanging Man Pattern

    Alex

    5 Infinite Banking Mistakes That Could Cost You Thousands

    Infinite Banking Mistakes to Avoid

    Aleksander

    Solana Firedancer: Solving Solana’s Biggest Problems with a New Engine

    Solana Firedancer explained

    Alexander

    What Is an Interest Coverage Ratio? How to Use This Financial Metric to Evaluate Company Health

    Interest Coverage Ratio Explained

    Hazem

    After-Hours Trading: Can You Trade After Financial Markets Close?

    After-Hours Trading Explained

    Alexander

    How to Scale a Crypto Exchange Business and Stay Competitive

    how to scale crypto exchange business
    liquidity-provider-logo
    • News
      • Stock Market Forecast
      • Stocks
      • Banks and Finance
      • Companies
      • Crypto
      • Forex
      • AI
      • Technology
      • DeFi
      • NFT
    • Articles
      • Crypto Payments
      • Trading
      • Crypto Exchange Business
      • Forex Business
      • Fintech
      • Liquidity
      • FinTech Awards
      • Blockchain
      • Investing
      • NFT
      • DeFi
    • More
      • Videos
      • Liquidity Providers List
      • Crypto Payment Providers
      • White Label Brokerage Platforms
      • Broker CRM Platforms
    [email protected]

    © 2024 Liquidity Provider. All Rights Reserved

    Privacy Policy Cookie Policy
    This site is registered on wpml.org as a development site. Switch to a production site key to remove this banner.