Companies in Vision Fund's portfolio, like Wag and Fair, are struggling; sources say Oyo founder invested $2B in his company with a loan backed by Masayoshi Son
Other companies the huge tech investment fund has backed have struggled lately — SoftBank Group Corp. 's longtime strategy … Tweets: @rolfewinkler , @aaronlucchetti , @second_measure , @maxseddon , @realmikelarson , @eliotwb , @arashmassoudi , @lisaabramowicz1 , and @shiraovide Tweets: Rolfe Winkler / @rolfewinkler : Scoopage here: @masason backed loan for @riteshagar so he could invest $2 billion in @oyorooms at a big markup, that's more paper gains for fund to book. w/ @Phred_Dvorak @heathersomervil @JBSteins https://www.wsj.com/... Aaron Lucchetti / @aaronlucchetti : WeWork was a high-profile failure for Softbank's Vision Fund, but other investments have struggled too https://www.wsj.com/... @second_measure : As @RolfeWinkler reports in @WSJ, “[Wag's] sales growth has stalled, credit-card data from research firm Second Measure shows. Rover's sales are larger and continue to increase.” https://www.wsj.com/... Max Seddon / @maxseddon : Could the days of wantonly handing out billions to startups with no plan to actually make money be over? Fascinating deep dive into SoftBank, the enablers of the WeWork disaster https://www.ft.com/... Mike Larson / @realmikelarson : What more can I add to this that I haven't already been saying since last spring/summer? And if you think there aren't any parallels to what happened at the very tail end of the #dotcom bubble and what's happening now, what more do you need to see? https://www.wsj.com/... Eliot Brown / @eliotwb : Great detail from @heathersomervil on the struggles of yet another SoftBank backed debacle: Fair, the Uber for Uber driver car leasing https://www.wsj.com/... https://twitter.com/... Arash Massoudi / @arashmassoudi : It's been a bumpy year at Masayoshi Son's SoftBank Our latest long-read on his company starts after the murder of journalist Jamal Khashoggi by Saudi agents That's the same Saudi gov whose $45bn backing made Son the world's most powerful tech investor https://www.ft.com/... Lisa Abramowicz / @lisaabramowicz1 : SoftBank's strategy of dumping cash on promising young companies is showing cracks at a number of its investments aside from WeWork. https://www.wsj.com/... This raises questions about the efficacy of “blitzscaling,” as Prof. Len Sherman calls it: https://www.youtube.com/... Shira Ovide / @shiraovide : This. Is. Not. Normal. https://twitter.com/... Expand More For Next Unexpand More For Next
Context & Ripple Effects
The Oyo disclosure is a case study in the investing style reported back in 2018, when sources described how [[a:927038|Masayoshi Son acts quickly and apart from the fund's investor committee and SoftBank's directors]]. A loan backed by Son himself let Ritesh Agarwal buy $2 billion of his own company at a markup — a transaction that books paper gains for the Vision Fund while concentrating risk in one founder's balance sheet.
The report lands amid visible cracks elsewhere in the portfolio: Wag's sales growth has stalled per Second Measure credit-card data, and Fair is reportedly struggling. It also foreshadows the Bloomberg reporting on SoftBank's practice of participating in multiple rounds to pump up startup valuations, which the WeWork debacle began to unwind weeks later.
First-order effects
- Oyo's markup gives the Vision Fund bookable paper gains on an investment whose underlying demand signals are weakening, mirroring the stall already showing in Wag's card data and Fair's leasing business.
- Ritesh Agarwal now carries a $2 billion debt position in his own company, tying his personal finances directly to Oyo's valuation — a structure that only works if marks keep rising.
Second-order effects
- Limited partners and SoftBank's own directors face harder questions about governance, since the deal was structured around Son's personal backing rather than committee approval — the same detachment documented in the earlier reporting on his process.
- The WeWork collapse forces SoftBank to retreat from round-inflating participation, removing the markup mechanism this Oyo transaction exemplifies and pressuring valuations across the remaining portfolio.
Third-order effects
- If the pattern holds, founder-financed markups and concentrated single-backer capital prove to be a distortion of VC pricing rather than durable value — the same bubble dynamic later blamed for SoftBank's $23B quarterly loss and a 62% drawdown in public Vision Fund holdings.
- The Vision Fund's internal culture of deference to Son, described by current and former employees, becomes a structural governance liability: deals get sized by conviction at the top rather than checked by the fund's own investment discipline.
The trend: Concentrated, founder-aligned capital can inflate portfolio marks in the short run but leaves the fund exposed when the same mechanism — round-pumping at rising valuations — reverses.