SoftBank invests nearly $100 million in FTX • TechCrunch

In more detail Investors in the emerging cryptocurrency exchange are also being scrutinized over the events that led to FTX’s bankruptcy and spectacular collapse.

Namely, many people ask how such high-profile investment firms were able to dump a collective $2 billion with apparently so little research.

For example, the famous Japanese investment conglomerate SoftBank is just one of many such firms that have supported FTX since its inception. It raised a funding round of $400 million In January, it valued the company at a staggering $32 billion. SoftBank, which invested as part of Vision Fund 2, announced this a few days ago sunk just under $100 million into the company. That investment is now is reduced to zero Saying SoftBank “He will not face a significant reduction in the value of his stake,” he said MarketWatch.

Of course, this isn’t the first time SoftBank has made an error in judgment when it comes to its investment. He spent at least 18.5 billion dollars We are workingit fell spectacularly from grace along with its co-founder Adam Neumann.

SoftBank also invested in construction technology startup Katerra, which previously spent more than $2 billion in funding. closure In June 2021. The firm also He gave a loan of 100 million dollars in 2017 through a private equity arm to blood testing company Theranos. Also He spent 500 million dollars to a digital mortgage lender before registering leading a SPAC that never materialized. That company has been the subject of various scandals over the past year and is struggling in the face of rising mortgage rates, a slowing housing market and an erratic CEO.

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

Note that the past SoftBank COO Marcelo Claure, who resigned in late January it is said to be a fight over payHe said about the FTX fiasco:

Image credits: Twitter

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On Nov. 12, Nikkei Asia reported that SoftBank Group “lost all of its cumulative investment returns through its Vision Fund business as global interest rate hikes and a weakening economic outlook hit the valuations of portfolio companies.”

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

SoftBank’s announcement about the FTX investment came soon Sequoia Capital is also reduced to zero The value of his stake in FTX — “A fraction of Sequoia’s capital, but as of last week, it probably represents one of the biggest unrealized gains.* in the venture firm’s 50-year history,” as reported Nov. 9 by TC’s Connie Loizos.

But Sequoia had egg on its face for more than investing in FTX. He also recently (end of September) posted what on his website Bloomberg as describedA long, rambling profile of Sam Bankman-Fried, aka SBF, the now-disgraced founder of bankrupt cryptocurrency exchange FTX. A 14,000-word piece (yes, you read that right) with the ironic title “Sam Bankman-Fried Has a Savior Complex – And Maybe You Should, Too,” is apparently “Sam Bankman-Fried Has a Savior Complex.” Sequoia websiteright under the dictum, ‘We help the brave build legendary companies,'” Bloomberg reports. Not surprisingly, as more details emerged about what was going on inside FTX, the piece was pulled. Bankman-Fried on Nov. 10 FTX CEO resigned from his position.

The New York Times reported this morning that “Pantera Capital and Galois were the latest hedge funds to announce FTX-related losses, $130 million and $40 million, respectively.”

FTX’s list of long-term 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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