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SoftBank writes off nearly $100 million investment in FTX • londonbusinessblog.com

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Former SoftBank COO expresses remorse, quotes FOMO

As more details: coming forward about the events leading up to FTX’s bankruptcy and stunning collapse also put the cryptocurrency exchange’s investors under scrutiny.

In fact, many people wonder how so many high-profile investment firms can pour a collective $2 billion with seemingly so little due diligence.

Notorious Japanese investment conglomerate SoftBank, for example, is just one of many companies that backed FTX after its startup has raised a $400 million funding round in January, valuing the company at a whopping $32 billion. SoftBank, which invested as part of its Vision Fund 2, revealed days ago that it sunk just under $100 million into the company. That investment is now marked to zero with SoftBank saying: “it would not face a material write-down in the value of its stake,” it said Market overview.

Of course, this isn’t the first time SoftBank has made a, er, misjudgment when it comes to its investment. It has (un)famously at least $18.5 billion in it We workwho along with co-founder Adam Neumann fell from grace in spectacular fashion.

SoftBank also put money into Katerra, a construction technology startup that also previously burned more than $2 billion in funding shut down in June 2021. So does the company borrowed $100 million to blood testing company Theranos in 2017 through a private equity arm. And it too $500 million pumped to digital mortgage lender Better.com before signing up for co-lead are never materialized SPAC. That company was the subject of several scandals in the past year and struggled with rising mortgage rates, a slowing housing market and a volatile CEO.

Particularly former SoftBank COO Marcelo Claure, who stepped down at the end of January a reported battle for wageshad this to say about the FTX fiasco:

Image Credits: Twitter

londonbusinessblog.com has reached out to SoftBank for comment on its investment in FTX.

On November 12, Nikkei Asia reported that SoftBank Group “all cumulative investment gains lost it had realized its Vision Fund business as global interest rate hikes and a weakening economic outlook challenged portfolio company valuations.”

The publication added that “the Vision Funds’ unrealized gains since investing began in 2017 have fallen to $1.46 billion negative in the July-September period from $8.49 billion positive three months ago. , according to the presentation of the quarterly results.”

SoftBank’s disclosure of its FTX investment came shortly after Sequoia capital also marked to zero the value of its stake in FTX – “a stake that represented a small percentage of Sequoia’s capital, but was probably one of the most sizable unrealized gains as of last week* in the venture firm’s 50-year history,” TC’s Connie Loizos reported Nov. 9.

But Sequoia had an egg on its face for more than just putting capital into FTX. It has also very recently (late September) published on its website what Bloomberg described as a ” long, meandering profile of Sam Bankman-Fried, aka SBF, the now-disgraced founder of bankrupt cryptocurrency exchange FTX.” Ironically titled “Sam Bankman-Fried Has a Savior Complex – and maybe you should too”, the 14,000 (yes, you read that right) piece was apparently “prominently displayed on the Sequoia websiteright under the saying, ‘We help the bold build legendary companies,'” Bloomberg said. Unsurprisingly, as more details emerged about the goings-on within FTX, that piece was removed. Fried resigned from his position as CEO of FTX on November 10.

The New York Times reported earlier today That “Pantera Capital and Galois became the latest hedge funds to announce losses to FTX, $130 million and $40 million, respectively.”

FTX’s long list of investors also includes: NEA, IVP, Iconiq Capital, Third Point Ventures, Tiger Global, Altimeter Capital Management, Lux Capital, Mayfield, Insight Partners, Lightspeed Venture Partners, Ribbit Capital, Temasek Holdings, BlackRock and Thoma Bravo.

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