SoftBank is an elephant that keeps falling over 🐘; The most fascinating charts about BNPL you've probably never seen 📊; I’m sorry but Bitcoin hasn't decoupled from anything 🤷‍♂️

FinTech is Eating the World, 3 October

Hey Everyone,

Happy Monday! Today’s issue is something I was really looking forward to sharing since Friday. We’re going to look at SoftBank, which is an elephant that keeps falling over (& shows that the future of FinTech investments will be totally different), the 7 most fascinating charts about BNPL you've probably never seen (if you’re in BNPL, FinTech, Credit, Lending, etc., this is a goldmine!), and see why Bitcoin hasn't decoupled from anything (bonus is a read on BTC fundamentals & why it was created). Let’s jump straight into the amazing stuff:

SoftBank is an elephant that keeps falling over 🐘

An edited version of one of SoftBank’s iconic presentations.

The (bad) news 🗞 The Vision Fund, a venture capital arm of the investing giant SoftBank, is planning to cut at least 30% of its workforce globally, or circa 150 of the 500 employees, according to a report by Bloomberg.

The news comes nearly two months after I converted SoftBank’s plans to review the organization’s size and structure which involved some potential cost-cutting.

More on this 👉 It seems that SoftBank is an elephant that’s trapped in a deep valley, and there are simply not enough unicorns to carry it out:

• We can remember that SoftBank recently reported its largest quarterly loss ever. Its tech-centric Vision Fund lost a whopping $23 billion in Q2 as tech investments turned sour. This follows a loss of $26 billion the previous quarter, which means that the company lost a whopping ~$50 billion this year so far. All their gains since 2017 have now been wiped out. Ouch 😳

• SoftBank was heavily invested in DoorDash, WeWork, Uber, etc., and almost all these investments didn’t pay off.

• It recently cut the valuation of its portfolio company Oyo to $2.7B (from $10B). The India-based hotel chain startup is months away from its IPO. Another major readjustment came from Klarna - although it raised $800M in new financing in July at a $6.7B valuation, it went massively down from the $45.6B valuation that SoftBank assigned the company a year ago.

• Also, losses were spread across SoftBank’s portfolio of 400+ companies, including, DiDi (the Uber of China), and SEA super app Grab, among others. The firm has marked down 284 of its portfolios in the latest quarter, including listed corporations and still-private startups.

  

Why is this important? 🤔 Massive and growing losses, and now brutal layoffs go on to show again that we’re in a completely different market cycle right now. Just recently, Softbank was one of Europe’s most prolific FinTech investors. Today, it’s an elephant that keeps falling over and indicates that the future of FinTech investments will be totally different. Here’s more on that + the takeaway: