Masayoshi Son says SoftBank plans to cut its startup investments by 50%-75% through March 2023, after Vision Fund reported a $20B+ loss for its fiscal year
Japanese conglomerate SoftBank is severely cutting its planned startup investments through next March, Chief Executive Masayoshi Son said in a Thursday earnings call.
Context & Ripple Effects
The $29B erosion of the Vision Fund's US portfolio since end-2021 and the fiscal-year loss of over $20B forced Masayoshi Son into defense mode: rather than doubling down, SoftBank is halving to three-quarters cutting its planned startup investments through March 2023. This is a reversal of the fund's signature check-writing model that made it the dominant late-stage backer of the last cycle.
The retrenchment did not stop at deal flow — within months Son moved to shrink the organization itself, first with plans to cut around 100 Vision Fund positions, then broader layoffs affecting over 150 people, more than 30% of its staff. By early 2023 the fund had posted a fourth straight quarterly loss with new investments under $350M, confirming the pullback was structural, not tactical.
First-order effects
- Late-stage startups lose their largest marginal buyer of equity: with SoftBank committing 50%-75% less through March 2023, founders who priced rounds assuming Vision Fund participation must find new lead investors or cut valuations.
- Vision Fund employees are directly exposed — the investment slowdown preceded headcount cuts across the fund's UK, US, and China operations.
Second-order effects
- Other growth-stage investors face both an opportunity and a warning: SoftBank's absence frees up allocation for rivals, but the $20B+ loss reprices what anyone will pay for unprofitable late-stage companies.
- SoftBank's own portfolio companies lose their most reliable follow-on source, forcing them toward profitability or down rounds as the fund conserves capital.
Third-order effects
- The mega-fund model of writing enormous checks across every sector gives way to concentration: by 2024-2025 SoftBank had shrunk its US portfolio further and redirected resources toward Son's large-scale AI bets, ending the era of diversified venture sprawl.
- If the pattern holds, late-stage startup financing permanently loses its single dominant price-setter, dispersing pricing power across smaller funds and corporate investors.
The trend: SoftBank is cycling out of broad-based late-stage venture investing and concentrating its remaining capital on AI infrastructure, marking the end of the Vision Fund era of indiscriminate mega-checks.