Softbank Vision Fund lost $150M on Paytm — a unicorn that was not what it seemed

Softbank's Vision Fund, the massive technology investment vehicle led by Masayoshi Son, invested in Paytm (One97 Communications), India's largest digital payments company. The investment was part of Softbank's broader strategy of betting on Indian technology companies.

Paytm's IPO in November 2021 was a disaster. The stock listed at ₹2,150 per share but quickly collapsed as investors questioned the company's path to profitability. By 2024, the stock was trading at a fraction of its IPO price, and Softbank's position in the company had lost approximately $150 million.

The loss was part of a broader pattern of Softbank Vision Fund losses in 2023-2024, as the fund's high-conviction bets on technology companies failed to deliver the expected returns. Paytm faced regulatory challenges from the Reserve Bank of India, increasing competition from Google Pay and PhonePe, and questions about its business model's sustainability.

The case highlighted the risks of Softbank's 'Vision Fund' model — making large, concentrated bets on high-growth technology companies based on the conviction of a single decision-maker, Masayoshi Son. When the bets went wrong, the losses were material even for a fund of Softbank's size.