SoftBank on Friday disclosed a $100 million venture capital investment in crypto broker FTX and said it would not face a material markdown in the value of it stake in the struggling crypto brokerage.
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Chief Executive Masayoshi Son said his $100 billion Vision Fund invested in FTX in what he described as a minor stake in the company as FTX’s overall valuation ballooned up to $32 billion in September only to see it collapse this past week.
“If any case of markdown but still that is very not material for us,” Son said during the company’s second quarter results, according to a transcript provided by FactSet.
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While it’s widely known that Softbank was one of a few dozen major private market investors in FTX, the exact dollar amount of that investment has not been widely disclosed.
Overall, Son said he’s been mostly steering the Vision Fund toward artificial intelligence (AI) companies, not crypto currency. He highlighted blockchain technology as one opportunity, however.
“Investing in currency is actually a bit different from our vision,” he said. “Through the business of cryptocurrency there may be something that comes to the technology revolution like blockchain that can be a positive for AI. So that can be some interpretations to make an investment.”
The disclosure by Softbank comes a day after venture capital firm Sequoia disclosed a $150 million loss on its venture investment in FTX after it marked down the value of the stake to zero. Overall, the fund it used to invest in FTX remains in good shape, with $7.5 billion worth of gains.
Sequoia and SoftBank were one of dozens of venture capital, private equity firms and wealthy individuals like quarterback Tom Brady who invested in FTX in private capital raising efforts by the company.
According to a report Thursday by The Information, FTX founder Sam Bankman-Fried used his own billions to invest in funds run by the same venture capital firms that backed his company.
Citing people familiar with the deals, The Information reported that Bankman-Fried invested in Paradigm and Sequoia Capital. Bankman-Fried’s trading firm Alameda Research backed Paradigm with at least $20 million in capital in 2021.
FTX’s venture investment unit, FTX Ventures, committed hundreds of millions of dollars to Sequoia Capital, Altimeter Capital Management and Multicoin Capital, The Information reported.
