That’s the approximate number of layoffs announced in the last month at four SoftBank-backed startups across the world.
The hits keep coming for the Japanese conglomerate which, after ballooning valuations with big cheques, has seen the stars of its portfolio tarnished, starting with the fall of WeWork. Then came Compass, Fair, Katerra, Wag and, as of this week, Zume, Rappi (SoftBank’s US$1-billion bet in Latin America), Getaround and Oyo, the hotel chain that’s been called “SoftBank’s jewel in India,” which one report suggests could lay off as many as 5,000.
SoftBank’s Vision Fund has also been dinged for cutting ties with startups without investing, even after signing term sheets, and CEO Masayoshi Son is now urging companies to focus less on scalable growth and more on profitability.
The change in tune is backed by the devastating hits. The robotic pizza-delivery service Zume was once among the biggest VC-backed companies in the pizza startup space, raising money at a US$4-billion valuation in November 2019. Now, two months later, it’s cutting half of its workforce.
The CEO of Getaround, the car-rental company that raised a SoftBank-led US$300-million Series D round in 2018, has placed the blame on its deep-pocketed investor, saying that while SoftBank was “a thoughtful partner,” the investment fund has “had their own challenges, and it’s hard to say that doesn’t have a ripple effect across their whole portfolio.”