Vision Fund's bet on Didi Chuxing falls $4 billion into the red

SoftBank’s Vision Fund’s single largest bet on Chinese tech is now $4 billion in the red. This has followed Beijing’s actions against ride-hailing group Didi Chuxing, punishing it for alleged data security lapses on the back of its blockbuster New York listing.

The Vision Fund’s had paid $11.8 billion in 2019 for its 20.1 per cent stake in the taxi app that is now worth $7.8 billion after Chinese regulatory pressure hit Didi’s business prospects, cutting its market value almost in half.

Softbank founder Masayoshi Son has for some time now intended to diversify the group’s  geographical footprint as he acknowledged the need to reduce the group’s heavy exposure to China, especially with its Alibaba stake accounting for 43 per cent of its total equity holdings. That rings especially true for the  $100 billion Vision Fund.

More than one-quarter of the Vision Fund’s portfolio is the Japanese group’s heavy investment in China’s tech sector. This has left the fund heavily exposed to shifting regulatory winds in the country.

Days after initiating the Didi probe, China’s cyber space regulators turned to scrutinising Vision Fund-backed Full Truck Alliance, causing its US-listed shares to fall 43 per cent since the start of July.

Other Vision Fund investments in China are facing regulatory pressure. Keep, the country’s most popular fitness app, recently withdrew plans for a US initial public offering.