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SoftBank Group Corp. on Monday reported a record loss at its Vision Fund unit as the value of public holdings like Coupang Inc. and Didi Global Inc. plunged.

The unit’s loss in the three months through Sept. 30 was ¥825.1 billion ($7.3 billion), exceeding the ¥788.6 billion loss the business posted amid pandemic-driven writedowns. Overall, the Tokyo-based company had a net loss of ¥397.9 billion in the period.

Masayoshi Son’s Vision Fund has been a volatile contributor of profit and loss since its creation in 2017. The first downturn started in 2019 with Uber Technology Inc.’s disappointing public debut and the implosion of WeWork, followed by the impact of the coronavirus.

Then a global surge in technology shares boosted Vision Fund’s profit to new records for three consecutive quarters last fiscal year, thanks to blockbuster listings by South Korean e-commerce giant Coupang, U.S. delivery firm DoorDash Inc. and Chinese online property platform KE Holdings Inc. Now the plunging value of some of those companies and a tech sector crackdown by Chinese regulators have once again pushed the business into the red.

“If you look at the Vision Fund’s performance so far this year, pretty much everything they brought to market so far has lost money since listing,” Kirk Boodry, an analyst at Redex Research in Tokyo, said ahead of the earnings announcement. “That’s an incredibly poor track record. They have been behind a lot of overpriced IPOs. It makes you wonder whether this whole cycle of investing, taking the companies public and then getting your money back is broken.”

SoftBank’s shares have slid about 24% this year.

The unrealized loss on valuation of public companies totaled $17.7 billion in the quarter across SoftBank’s two Vision Funds. Coupang was responsible for $6.7 billion of the loss. Two quarters earlier, the South Korean e-commerce leader marked Son’s best return since Alibaba Group Holding Ltd.’s listing when it contributed $24.5 billion to Vision Fund’s profit.

SoftBank’s portfolio of Chinese startups was particularly hard-hit after the country’s regulators launched an offensive against the tech sector. Didi, whose debut at the end of the previous quarter was one of the largest U.S. offerings of the past decade, lost $6.1 billion in the quarter and Uber-like trucking startup Full Truck Alliance Co. was down $1.2 billion.

KE Holdings Inc., which runs the Beike online property service, lost $2.2 billion of value. The little-known Chinese startup handed SoftBank an unrealized gain of $5.1 billion when it went public in August 2020, pushing up Vision Fund profit to a new record in that quarter. Even though the company has not been directly targeted by regulators, its stock is down more than 70% from its peak and is trading below the IPO price.

“The Chinese regulators have no incentive in clearing the air and publicly signaling that the crackdown is over,” Boodry said. “This uncertainty over the future of China tech can go on for a while.”

The losses in the public portfolio were offset by ¥455.9 billion of realized gains as SoftBank cashed in on some of its most successful investments. SoftBank sold $2.2 billion worth of DoorDash stock in August and raised about about $1.69 billion from a sale of Coupang stock in September.

Son has also considerably scaled down his controversial program of trading stocks and options, liquidating his entire stakes in Amazon.com Inc., Taiwan Semiconductor Manufacturing Co. and PayPal Holdings Inc. SoftBank held a total of $5 billion of “highly liquid listed stocks,” down from $13.6 billion at the end of the previous quarter.

“For the next few quarters, we don’t have very much to look forward to in the Vision Fund business,” Boodry said. “Sure, there are some upcoming IPOs they can point to, but it’s just drowned out by all the negative noise. And none of them are going to be as big as Didi.”

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