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Other companies the huge tech investment fund has backed have struggled lately

SoftBank Group Corp. 9984 2.43% ’s longtime strategy of dumping mountains of cash on promising young companies to create big winners failed dramatically at WeWork, and is showing cracks at a number of its other investments.

SoftBank’s nearly $100 billion Vision Fund gave companies like dog-walking app Wag and indoor farm Plenty more cash than they wanted, but the investments failed to ignite growth. After a sizable bet on online car-lessor Fair, that company is struggling to stay afloat. Wag is for sale, people with knowledge of the companies say.

Dozens of other firms, such as Chinese ride-hailing giant Didi Chuxing and South Korean e-commerce company Coupang, are in industries known for burning cash and with uncertain paths to profitability. The Wall Street Journal reported that Didi—the Vision Fund’s biggest investment at $11.8 billion—was seeking more cash this summer, months after a company executive said it was losing money on every fare booked. Coupang, in which the Vision Fund has invested $2.7 billion, said that last year its operating loss grew faster than its revenue.

The failure of WeWork’s initial public offering forced SoftBank to fund a $9.5 billion bailout to salvage its $9 billion investment and helped to sour the market on big-spending, unprofitable startups. It has also drawn attention to SoftBank’s investing strategy, which has had big successes in the past.

SoftBank will be under scrutiny on Wednesday when it releases earnings. Analysts are estimating SoftBank and the Vision Fund will have to take billions of dollars in losses as they mark down the value of many investments. Investors are watching the fund’s performance closely—particularly because SoftBank is trying to raise funds for a second Vision Fund even bigger than the first.

“All funds have investments that are performing at different levels,” said a SoftBank spokesman. “The Vision Fund is barely two years old and we’re confident that our diversified portfolio of 88 companies will produce strong returns over the long term.” Many of the Vision Fund’s investments have appreciated in value multiple times, said a person familiar with the fund.

Some of SoftBank’s gains have come by adding to its bets on companies at higher valuations. In one of the starkest examples, SoftBank and the Vision Fund have led more than $2 billion in funding rounds for fast-growing Indian hotel chain Oyo Hotels & Homes since 2015—pushing the valuation up to $10 billion from less than $1 billion just two years ago and booking paper gains for the fund along the way.

In the latest round, announced in October, the Vision Fund led an $800 million investment that raised its stake in Oyo to 48% from 45%. But SoftBank’s chairman, Masayoshi Son, gave the company an additional boost by backing a loan to its 25-year-old founder, who used the money to invest $2 billion into Oyo, including buying stakes of $1.3 billion from venture-capital investors including Sequoia Capital and Lightspeed Venture Partners, according to people familiar with the deal. Representatives for Sequoia and Lightspeed declined to comment. Mr. Son has since recused himself from decisions regarding future investments in Oyo, says a person familiar with the matter.

Oyo, through a spokesman, declined to comment on questions about Mr. Son’s loan guarantee. A SoftBank spokesman said it is standard practice for venture-capital firms to lead subsequent rounds in winners.

Those bets could still produce rich paydays if things go well. Mr. Son has gambled on promising startups for decades—though mostly with smaller check sizes—and has notched at least one spectacular success: an early investment in Chinese e-commerce goliath Alibaba Group Holding Ltd. that is now worth more than $100 billion.

The Vision Fund, too, has made some successful bets. It sold Indian e-commerce firm Flipkart to Walmart for a $1.5 billion profit. And at the end of June, it said the companies that had gone public in its portfolio—including Uber Technologies Inc. and cancer-test company Guardant Health —had increased in value 2.6 times from the previous year, although some of those shares have since tumbled.

Wag had been seeking only $75 million in funds before the Vision Fund persuaded it to take $300 million in January 2018, said a person familiar with the events. Employees at Wag thought the money would let them dominate the burgeoning on-demand pet-services industry and defeat rival Rover, a dog-sitting app that was moving into walking as well. Rover soon raised more than $100 million itself, eroding Wag’s fundraising lead.

The Vision Fund’s cash was supposed to help the company deliver on its ambitions to expand internationally, and to move beyond dog-walking into related pet services including grooming, boarding, food and veterinary care.

Wag’s new chief executive, Hilary Schneider, who was installed around the same time as the Vision Fund investment, failed to deliver on those ambitions. Sales growth has stalled on her watch, credit-card data from research firm Second Measure shows. Rover’s sales are larger and continue to increase.

Now, Wag is trying to sell itself, likely at a price well below the $650 million valuation of the Vision Fund investment, people close to the fund say. It has already been rebuffed by Rover, a person familiar with the discussions said. Recode earlier reported that Wag was exploring a sale.

“Wag was a very exciting high-growth business that created a new category, but when SoftBank came in, they hired a whole layer of management who changed the nature of the business,” said Duncan Davidson, general partner of venture firm Bullpen Capital, an early Wag investor.

Ms. Schneider has focused on improving the customer experience at Wag, building a deeper leadership team, and improving profits for each dog walk, according to a statement from Wag’s board of directors. “The Board and Wag leadership have full confidence in the direction of the company,” the statement said.

In 2017, the Vision Fund similarly gave Plenty, which builds indoor farms, double the $100 million it had initially sought. Plenty’s management realized it couldn’t grow as fast as the fund wanted, according to a person familiar with the company. About a year ago, management decided it would be better to keep its staff lean, focus on its technology and postpone its international plans, said a Plenty spokeswoman.

The Vision Fund led a more-than-$380 million investment in Fair, the car lessor, in late 2018. At that point, that was seven times more than its next-largest round—and more cash than many of its competitors had ever raised. The Santa Monica, Calif.-based company spent most of that money in less than a year, according to former employees.

Fair buys cars and leases them to consumers as well as drivers for ride-hailing company Uber, another of the Vision Fund’s biggest investments. The money for Fair was supposed to support Uber by getting the company more drivers, say people close to Fair.

With the money, Fair added new car lots, hired more salespeople and offered promotions that attracted new customers but made the car leases unprofitable, say former employees. The company often ended up underwater on cars it leased because they so steeply depreciated in value that Fair would have to sell them at auction at a discount.

Fair also struggled with logistics. Some cars were shipped to the wrong state, stolen from lots, or sat for months on a dealership lot or in the driveways of customers who had stopped paying, according to former employees. Fair declined to comment.

When Fair founder and former Chief Executive Scott Painter approached SoftBank a few weeks ago about another round of funding, it responded by dispatching a team of auditors to Fair’s headquarters for a joint review of its finances, according to former employees.

Mr. Painter resigned as CEO last week after the company laid off 40% of its workforce, according to statements by the company and people familiar with the matter, with Fair’s board temporarily installing a Vision Fund partner in his place.

Fair has moved to cut costs, including scrapping plans for a promotional car giveaway in October, a person with knowledge of the matter said. SoftBank also provided Fair about another $25 million so the company could pay its bills, say people familiar with the matter. Mr. Painter, who is still chairman of Fair’s board, is pursuing additional funding for the company, the people say.