Unicorns Should Prepare For A Long Funding Winter, Says Masayoshi Son
The SoftBank CEO also said that the rate of new investments in startups will be half or could be as small as a quarter in compared to the last year
Masayoshi Son, chief executive of SoftBank, said that the ongoing funding winter will last longer for unicorn founders who are unwilling to accept a lower valuation to raise funds and continue to believe in their previous valuation.
"Our vision fund saw huge losses but unfortunately unicorn company leaders still believe in their valuation and they would not accept the fact that they may have to see their valuation go lower than they think. So, until the multiple of unlisted companies is lower than that of listed companies, we should wait," said Son, in a post-earnings briefing.
He also added that, "The winter for publicly-listed companies is still continuing, but a similar downturn for startups may last longer. Now, seems like the perfect time to invest when the stock market is down so much, and I have the urge to do so, but if I act on it, we could suffer a blow that would be irreversible, and that is unacceptable."
In comparison with the last year, Son also said that, "The amount of new investments in startups will be half or could be as small as a quarter."
The SoftBank's current portfolio of listed companies in India includes Paytm, Delhivery and Policybazaar. As per reports, SoftBank has invested a total of $1.6 billion in Paytm so far and its current invested value stands at $1.19 billion. The fund invested in Delhivery is $397 million and in Policybazaar it is $199 million. The report also said that the Indian startup ecosystem continues to witness a major downfall in funding rate.