TOKYO: SoftBank's US$100 billion Vision Fund is poised to have a new number-one asset in its portfolio with the upcoming flotation of top South Korean e-retailer Coupang, furthering a turnaround that has seen the fund yo-yo from huge losses to record profit.
The US$50 billion target valuation that Reuters reported this month would likely see the decade-old firm surpass recently listed US food deliverer DoorDash on a roster of assets that also includes stakes in TikTok parent ByteDance and ride-hailers Grab and Didi.
The Vision Fund built up its 37 per cent stake in Coupang for US$2.7 billion, mostly at an US$8.7 billion post-money valuation, a person familiar with the matter said. The fund is not expected to sell shares in the initial public offering (IPO) that Coupang filed for in New York, the person said, declining to be identified as the information was not public.
SoftBank Group and Coupang declined to comment.
Achieving a US$50 billion valuation would add to good news for the fund, which is bouncing back from an annual loss in March. This month, it announced record quarterly profit, driven by the listings of DoorDash and home seller Opendoor Technologies and share price rise of ride-hailer Uber Technologies.
The fund has written big cheques for late-stage start-ups to fuel rapid growth, with two-thirds of the value of its portfolio concentrated in 10 assets including Coupang.
The 10 include 25 per cent of British chip designer Arm - to be sold to Nvidia pending regulatory approval - but not stakes in high-profile stumbles like office-sharing firm WeWork.
The fund's largest assets include its 22 per cent stake in DoorDash, whose share price has doubled since the firm's December IPO, sending its market capitalisation to US$65 billion.
SoftBank initially invested in Coupang in 2015, adding it to a stable of e-commerce hits that included 25 per cent of China's Alibaba Group Holding, before placing it under the fund.
The e-retailer has grown rapidly during stay-home policies while the COVID-19 pandemic has forced other portfolio firms like Indian hotel chain Oyo to scramble to preserve cash.
Analysts see Coupang's US$50 billion valuation as feasible given its first-mover status and as it expands beyond replacing brick-and-mortar retail with a rising number of online channels.
It is the biggest e-retailer in South Korea that directly handles inventory, with 2020 purchases at about 21.7 trillion won (US$19.62 billion), showed data from WiseApp.
"The market's assessment isn't exaggerated," said analyst Park Eun-kyung at Samsung Securities. "Coupang's market leadership is a premium factor."