SoftBank Group seen booking modest fourth quarter loss as Vision Fund suffers

By Anton Bridge

TOKYO (Reuters) -Japanese technology investor SoftBank Group is expected to book a quarterly net loss of 26.9 billion yen ($184.4 million) on Tuesday as early-stage tech startups fell out of favour and losses widened at major portfolio firms.

The forecast downgrades are seen by analysts as being partially offset by a stronger yen and the continued rise in the share price of SoftBank's telecommunications holdings, such as T-Mobile, which finished the quarter up more than 20%, close to a record high.

The net loss for the January-March quarter is based on the average of five analyst estimates compiled by LSEG and compares to net income of 231 billion yen over the same period the previous year.

The share price of portfolio companies such as Swiggy and Ola Electric each fell around 40% over the period. Losses at each have ballooned since their listings last year in the face of intense competition in the quick commerce and electric vehicle sectors.

Nomura Securities analyst Daisaku Masuno forecast a collective loss of around $900 million for listed companies held in SoftBank's Vision Fund investment vehicles over the quarter.

New venture capital investment concentrated in large established players over the quarter, while investment in earlier stage firms - such as those in the Vision Fund 2 - fell to the lowest level in five quarters, Crunchbase data showed.

SoftBank played a part in this, making its largest spending announcements in years, including in ChatGPT maker OpenAI, in which it committed to investing between $20 billion and $30 billion.

In March SoftBank also announced its purchase of chip startup Ampere Computing for $6.5 billion.

But analysts doubt how much these planned investments in artificial intelligence will benefit its bottom line as these projects are yet to demonstrate tangible successes and competition is fierce.

"SoftBank has paid a steep price for ChatGPT perhaps without fully understanding how these increasing number of AI chatbots can coexist and make money," said Amir Anvarzadeh, Japan equity strategist at Asymmetric Investors.

Alongside, recent market uncertainty has thrown the initial public offering market into retreat, which may further weigh on valuations in SoftBank's portfolio of unlisted companies.

Since the beginning of April SoftBank holdings Klarna - a Swedish fintech firm - and Oyo - an Indian hotel chain - both delayed their listings following the announcement of tariffs by U.S. President Donald Trump.

However payments firm Paypay is currently preparing for an IPO, a subsidiary of SoftBank announced at its earnings results last week.

($1 = 145.8500 yen)

(Reporting by Anton Bridge; Editing by Stephen Coates)