Chinese e-commerce giant, Alibaba Group Holding Ltd., experienced a slump in Hong Kong after the Financial Times reported that its early backer, SoftBank Group Corp., is moving to sell the majority of its stake in the company. This announcement comes alongside news that Japanese billionaire Masayoshi Son's SoftBank Group has decided to sell its early-stage venture capital arm, SoftBank Ventures Asia.
The buyer for this venture capital arm will be The Edgeof, a newly formed investment firm helmed by Taizo Son, Masayoshi Son's youngest brother. While the exact sum remains undisclosed, the deal is set to be finalized later this year upon obtaining regulatory approval.
This divestment follows significant financial struggles for SoftBank, which reported a net loss of $5.9 billion and a 90% decrease in startup investments during the quarter ending last December. These challenges have largely been attributed to difficulties faced by its flagship SoftBank Vision Fund as plummeting returns from startups continue.
In August of last year, SoftBank had planned on purchasing SoftBank Ventures Asia for $150 million; however, negotiations with other prospective buyers ultimately fell through.
As these developments unfold within both Alibaba and SoftBank Groups respectively, it remains uncertain how their business relationship will evolve and what long-term impacts may emerge from these decisions.