The public market debut of South Korea’s largest e-commerce company, Coupang Inc, reportedly generated roughly $33 billion gain on paper for Japan’s SoftBank Group Corp earlier this week. This marked a dramatic turnaround for the $100 billion Vision Fund of the conglomerate.
Coupang raised S$4.6 billion in the US stock market’s biggest initial public offering this year as its shares opened 81 per cent above their offer price.
According to reports quoting sources familiar with earlier fund-raising, a 37 per cent stake in the company had been taken up earlier by SoftBank for about $3 billion which gave the Japanese firm a about $33 billion headline profit if prices hold.
For SoftBank, this very successful stock market launch for Coupang is a very welcome event because the Japanese investment company is currently grappling with the collapse of billions of dollars worth of funds linked to Britain’s Greensill Capital, a supply chain finance start-up.
Vision Fund is Greensill’s biggest backer.
A turnaround of the Vision Fund of the firm, a huge venture capital operation that is well known for making investments in early stages in Uber and other tech industry startup successes, helped the Japanese conglomerate to report last month a more than 20 times rise in its third-quarter net profits.
It was only a year ago that SoftBank was struggling with the flop IPO and collapse in value of the office sharing firm WeWork which raised questions among investors about the midas touch of Chief Executive Officer Masayoshi Son being lost and threatened plans of establishing a successor to Vision.
The Covid-19 pandemic had also forced Son to sell assets.
Following an uptick in activity and the fortunes of the group in the second half of 2020, a $225 million late-stage funding round for healthcare startup Forward Health was the first major investment of the Japanese firm in 2021.
In December, a very successful market launch of DoorDash resulted in an $11 billion earning for the Vision Fund as the food delivery company was valued at more than $70 billion in the IPO. The home seller Opendoor Technologies’s initial offering in December also added on to the coffers of the fund.
Large stakes in China’s biggest ride-hailing firm Didi, as well as Uber’s Southeast Asian rival Grab is still held by the fund. An attempt to take advantage of the mania for special purpose acquisition companies is also being made by SoftBank with the firm having launched a handful of blank-check firms this year. however none of those firms have so far found any investment targets.
There were no comments on the issue available from SoftBank.