SoftBank Investment Advisers considers launching private credit strategy to help struggling tech startups

As per sources familiar with the matter, SoftBank Investment Advisers, responsible for managing two Vision Funds, is considering launching a private credit strategy that would provide structured financing in the form of debt or debt-like instruments to late-stage tech startups. The fund would aim to offer liquidity options to tech startups, including portfolios held by SoftBank, amid a slow venture funding environment and a weak market for IPO exits. The fund targets mid-teens returns and is still in the early stages. SoftBank has not responded to a request for comment. With the collapse of Silicon Valley Bank in March, several major investment and private equity firms have stepped in to fill the funding gap in tech, especially in debt financing. By tapping into the rapidly growing private credit market, SoftBank would be able to provide capital for pre-IPO companies that need to survive longer in an increasingly difficult environment to raise new capital. SoftBank’s Vision Fund portfolio includes neobank Chime and Revolut. The company is nearing the end of deploying the $56 billion capital in Vision Fund 2. SoftBank-owned chipmaker Arm Ltd filed confidentially for a U.S. stock market listing last month, setting the stage for one of the biggest tech IPOs in the U.S. this year.