Masayoshi Son has been sued.

This scene is truly unexpected —

Recently, the High Court in London heard a lawsuit that had spanned many years: The supply chain finance fund formerly under Credit Suisse is seeking compensation from SoftBank, the investor of Greensill Capital, for the $440 million loss caused by the latter's bankruptcy in 2021.

At its peak, both Masayoshi Son and Credit Suisse attached great importance to Greensill Capital. The former made a large - scale investment of about $1.5 billion, while the latter supported it through its $10 billion supply chain fund. In the initial concept, once Greensill Capital went public, they would reap a capital feast.

However, the unexpected happened faster. In 2021, Greensill Capital suddenly collapsed. Not only did SoftBank's investment go up in smoke, but it also faced a lawsuit because of a series of past operations. Looking back, Masayoshi Son, the head of SoftBank, may not be blameless — it was the bankruptcy of two super unicorns involved that led to this storm.

It's really sad.

Four years after the bankruptcy of a unicorn, SoftBank is sued

This dispute originated from the unicorn Greensill Capital invested by Masayoshi Son.

Back in 2011, financial expert Lex Greensill founded Greensill Capital, an eponymous institution headquartered in London. The company focuses on the field of supply chain finance. Its main business is to allow enterprises to extend the payment time of bills and reduce the accounts receivable time of suppliers. Simply put, it provides short - term loans to small and medium - sized enterprises, and financial institutions earn the interest rate spread from it.

This story attracted Masayoshi Son. He found that if SoftBank invested in Greensill Capital, the latter could provide financing channels for SoftBank's troubled portfolio companies. As a condition, SoftBank did not need to provide collateral of equivalent value. It was such an operation that laid the groundwork for future disputes.

In May 2019, SoftBank invested $800 million in Greensill Capital; in October of the same year, it added another $655 million. The total investment of the two times was about $1.5 billion, and SoftBank became the major shareholder.

In addition to SoftBank, the main source of funds for Greensill Capital also included the Credit Suisse Supply Chain Fund managed by Credit Suisse's asset management department. In those years, Greensill Capital was extremely popular and became a well - known financial unicorn in Europe at that time. The supply chain fund also attracted investors to inject $10 billion.

At the beginning of 2020, there were rumors about Greensill Capital's IPO. However, the outbreak of the pandemic began to squeeze the supply chain. Instead of waiting for the listing moment, Greensill Capital's business became unsustainable. Previously, in order to make a profit, it provided financing to small companies willing to pay higher interest, which accelerated its plunge into the quagmire. Under the crisis, customers began to fail to repay their loans as agreed.

Dangers came like dominoes. Eventually, Greensill Capital had a major setback and filed for bankruptcy in 2021.

The investors were not spared. The $1.5 billion invested by Masayoshi Son was lost, and Credit Suisse was even hit by a disaster. According to reports at that time, due to the bankruptcy of Greensill Capital, Credit Suisse suffered heavy losses. Coupled with a series of scandals such as tax evasion, money laundering, and management turmoil, Credit Suisse was pushed to the forefront.

In March 2023, Credit Suisse finally went bankrupt. Coordinated by the Swiss government, Credit Suisse was eventually acquired by its competitor, UBS Group. A financial giant collapsed.

Masayoshi Son's troubles

So far in the story, both SoftBank and Credit Suisse are victims. Why are they in court?

It turned out that shortly after the merger of the two Swiss banking giants, they formally filed a $440 million claim against SoftBank Group in London as part of their plan to recover losses.

Recently, the case officially entered the trial process, and more details were made public: The plaintiff claims that the $440 million they are seeking compensation for is a loan made by Greensill Capital to the US technology construction company Katerra.

Here, we have to mention the intricate cooperation relationship between Greensill Capital and SoftBank: SoftBank bought bond - like securities from Greensill Capital, and Greensill Capital provided financing for companies in SoftBank's Vision Fund portfolio. During the prosperous years of Greensill Capital, it provided loans to unicorns such as OYO Hotels, Fair Financial, and Katerra in SoftBank's portfolio companies.

Among them, Katerra was founded in 2015 and claimed to revolutionize the traditional construction field with the model of "prefabricated construction + platform integration". SoftBank was very generous — from 2018 to the end of 2020, SoftBank invested nearly $1.8 billion in Katerra and became its largest investor.

The construction field where Katerra is located is a typical capital - intensive and long - cycle industry, so it naturally received a large amount of financial support from Greensill Capital. However, the good times did not last long. Katerra became one of the failures in Masayoshi Son's investment career and finally went bankrupt.

The controversial operation occurred — on the verge of bankruptcy, to salvage the situation, SoftBank led the capital restructuring of Katerra. As part of the agreement, Greensill Capital gave up its creditor's rights to Katerra in exchange for shares. However, with Katerra's bankruptcy, the value of the shares became zero, and the $440 million from Credit Suisse's supply chain finance fund vanished.

But now UBS believes that SoftBank should be responsible for leading this decision at that time to "protect the value of its own investment".

Both sides hold their own views. SoftBank said in court documents that it paid $440 million to Greensill Capital according to the agreement to repay Credit Suisse, but the funds were misappropriated by the institution. "This lawsuit is baseless. (Credit Suisse) is just trying to blame SoftBank for the losses caused by its own negligence and risky behavior."

It can be said that Credit Suisse, SoftBank, and Greensill Capital are all trying to excuse themselves.

The trial is still ongoing. The latest news is that Lex Greensill, the founder, appeared in court as a key witness last week. According to him, he had a close relationship with Masayoshi Son, but when it came to the transaction related to Katerra, he said that "he was finally forced to accept SoftBank's restructuring plan". The situation is not optimistic for SoftBank.

Maintain awe

In summary, it's simply because two unicorns heavily invested by SoftBank — Greensill Capital and Katerra — went bankrupt one after another, which led to this lawsuit storm.

This is not difficult to understand. "Go big or go home" — Looking at the well - known investment projects of Masayoshi Son and SoftBank, they often make large - scale investments once they decide to act. For a long time, such all - in strategies created many investment myths in Silicon Valley. However, when the same methodology was replicated, it became a series of holes.

Looking around, investment institutions are paying a heavy price for investing in troubled unicorns.

Even the well - known Temasek is not spared — with the frequent failures of former star projects such as FTX and eFishery, Temasek, as an investor, has suffered heavy losses and has begun to reduce the scale of its investment in start - ups at an unprecedented speed.

Among them, FTX was once the world's second - largest cryptocurrency exchange with a valuation of $32 billion, and eFishery was the first unicorn enterprise in the global aquaculture industry. They rose rapidly with glamorous stories but fell in an extremely absurd way — with internal data fraud in the companies and finally went bankrupt, leaving Temasek with billions of dollars in investment losses.

After sorting out, these troubled unicorns have common characteristics: extremely high valuations and rapid financing. When the capital market was booming, they were pursued by funds. Investors were influenced by the FOMO (fear of missing out) sentiment and spent large sums of money just to grab a share. The influx of funds briefly propped up their business stories.

However, the bubbles piled up by funds will eventually dissipate.

When the valuation bubble fades, investors collectively reflect on their investment logic and become more cautious and pragmatic. Those enterprises that were once extremely popular but had no profitability and relied solely on capital injection are the first to be abandoned.

This is the common dilemma faced by global unicorns: how to raise the next round of financing. In fact, more start - ups are struggling silently — lowering their valuations, selling assets, or closing down quietly.

This situation serves as a constant warning.

This article is from the WeChat official account "Investment World" (ID: pedaily2012), author: Wu Qiong, published by 36Kr with authorization.