SoftBank Group Corp reported a 397 billion yen ($3.5 billion) net loss for the July-September quarter, dragged down by a $10 billion investment loss at its Vision Fund unit as tech valuations fell.

While CEO Masayoshi Son describes SoftBank as a goose laying “golden eggs”, referring to its stakes in startups that go to market, initial public offerings (IPOs) have dropped off and shares in many top assets like online retailer Coupang fell during the quarter.

“The strategy of let’s create the perception of enhanced value by taking things public hasn’t really worked this year,” Redex Research analyst Kirk Boodry said.

Depressed valuations in SoftBank’s China portfolio amid a regulatory crackdown continued to drag with its stake in ride-hailer Didi, acquired for $12 billion, currently valued at $7.5 billion.

The group’s largest asset, Chinese e-commerce firm Alibaba , fell by around a third in the second quarter.

SoftBank’s quarterly net loss compared with a profit of 628 billion yen in the same period a year earlier.

Bright spots for the Vision Fund include its India portfolio with ride-hailer Ola and logistics firm Delhivery targeting listings.

SoftBank has been trimming stakes following the expiry of lock-up periods, while focusing on investing through its second Vision Fund that has $40 billion in committed capital from SoftBank itself.

Reuters