SoftBank Cuts Back Spending, Leaving Startups Desperate for Cash

Apr 25, 2022

https://liquidity-provider.com/app/uploads/2022/04/dizajn-bez-nazvaniya-6-1.png

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

India to Tax Crypto Income, Launch Central Bank Digital Currency
India to Tax Crypto Income, Launch Central Bank Digital Currency

Tax revenue from the transaction of crypto assets-related products would be charged at a rate of 30%, according to Finance Minister Nirmala Sitharaman's budget address on Tuesday.

Banks and Finance
Version 1.14.0. of B2Core for iOS is Now Available. Updated with Even More Useful Functions!
Version 1.14.0. of B2Core for iOS is Now Available. Updated with Even More Useful Functions!

B2Core is excited to announce the release of B2Core iOS 1.14.0., which contains a slew of improvements designed to enhance the app's functionality and make users' lives easier and more pleasant.

Companies
Liquidity Provider

How to Promote PAMM/MAM & Copy Trading Service as a Broker
Almost every broker strives to give its customers a variety of investment options, particularly for those who do not want to trade on their own. The employment of customized trading robots, which can be operated directly on their accounts, allows them to accomplish this goal.

discover
What is Liquidity Pool Liquidity Provider articles

Liquidity Provider

What is Liquidity Pool? The Importance of a Reliable Liquidity Provider

Let's find out what is a liquidity pool, how does liquidity impacts brokerages, and how to choose the best liquidity pool provider.

Liquidity

Contact Us

Contact the Liquidity Provider
for any questions and advertising inquiries b2broker

    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

    Alexander

    Is IUL a Good Investment Strategy? — A Guide for Beginner Investors

    Is IUL a Good Investment Strategy?

    Alexander

    Are Crypto Wallets Safe? — Tips to Ensure Maximum Protection of Your Digital Assets.

    Tips to Ensure Maximum Protection of Your Digital Assets

    Alexander

    Roth IRA Guide: What It Is and What You Need to Know.

    Roth IRA Guide: What It Is and What You Need to Know

    Alexander

    From Gold to Index Funds and Crypto: Where to Invest in 2023 for Long Term?

    From Gold to Index Funds and Crypto: Where to Invest in 2023

    Alexander

    Understanding Algorithmic Trading: A Guide for Beginners

    Understanding Algorithmic Trading: A Guide

    Alexander

    Stop Vs. Stop-Limit Order: How Do They Differ?

    Stop Vs. Stop-Limit Order: How Do They Differ

    Alexander

    Invest in the Intelligent Future: The Best AI Stock Market Leaders of 2023

    Invest in the Intelligent Future: The Best AI Stock Market Leaders of 2023

    Deborah Middleton

    How MEC Rules Can Impact Your Life Insurance Policy

    How MEC Rules Can Impact Your Life Insurance Policy.

    Deborah Middleton

    Navigating the Ethical Landscape of AI: Challenges and Solutions

    Navigating the Ethical Landscape of AI: Challenges and Solutions

    Deborah Middleton

    Managing Your Financials The Right Way – A Startup Guide 

    Managing Your Financials The Right Way - A Startup Guide

    Anna

    A Beginner Guide To The Crypto Analysis Tools.

    A Beginner Guide To The Crypto Analysis Tools.

    Anna

    A Brief Introduction to Scalping

    A Brief Introduction to Scalping.

    Anna

    How to Invest in Stocks: A Beginner’s Guide

    How to Invest in Stocks: A Beginner’s Guide

    Anna

    Tips On Finding Crypto Liquidity Providers In 2023

    Tips On Finding Crypto Liquidity Providers In 2023.

    Anna

    Forex Liquidity in 6 Questions and Tips on How to Become Successful in Trading

    Forex Liquidity in 6 Questions and Tips on How to Become Successful in Trading

    Anna

    A Brief and Comprehensive Guide to Spot Trading.

    A Brief and Comprehensive Guide to Spot Trading.

    Anna

    What is The Difference Between Liquidity Provider and Liquidity Aggregator?

    What is The Difference Between Liquidity Provider and Liquidity Aggregator?

    Tamta

    What Is SWIFT Banking System?

    What Is SWIFT Banking System?

    Tamta

    How Liquidity Providers Drive The Foreign Exchange Market

    How Liquidity Providers Drive The Foreign Exchange Market

    Tamta

    How to Start Investing In Crypto

    How to Start Investing In Crypto

    Tamta

    5 Best Crypto CFD Liquidity Providers 2023

    5 Best Crypto CFD Liquidity Providers 2023.

    Tamta

    The Power Of Liquidity For Crypto Exchanges

    The Power Of Liquidity For Crypto Exchanges

    Tamta

    Institutional Forex Liquidity Explained: Why Do We Need It?

    Institutional Forex Liquidity Explained: Why Do We Need It?

    Tamta

    What Is Return On Investment (ROI), And How Can You Calculate It?

    What Is Return On Investment (ROI), And How Can You Calculate It?
    Latest News - Liquidity Provider: Business & FinTech Media
    • News
      • 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
    [email protected]

    © 2023 Liquidity Provider. All Rights Reserved

    Privacy Policy Cookie Policy
    This site is registered on wpml.org as a development site.