|The global ride-hailing industry has its own Game of Thrones:|
SoftBank Boosts Bet on Ride Hailing With Play for Stake in Uber
By Greg Bensinger and Joann S. Lublin
The Wall Street Journal
Updated July 25, 2017 6:41 p.m. ET
A SoftBank investment in Uber would muddy the mix of global alliances in the global ride-hailing business since the Japanese tech investor already own stakes in the three largest Asian ride-hailing companies. Photo: Eric Gay/Associated Press
SoftBank Group Corp. 9984 0.28% is angling for a piece of Uber Technologies Inc., a move that would further the grand ambitions of the tech investor’s founder and muddy the mix of alliances in the global ride-hailing business.
The Japanese technology company has approached San Francisco-based Uber about a multibillion-dollar stake, people familiar with the matter said. Talks between the companies are described as preliminary and one-sided, and any deal would likely be on hold until Uber hires a new chief executive, which isn’t expected for weeks, the people said.
SoftBank founder Masayoshi Son has sought to seize hold of cornerstone technologies he expects to dictate how humans interact with the world for decades to come. As early adopters of self-driving technology, ride-hailing firms are central to Mr. Son’s strategy to accelerate a robotic revolution and generate value from his varied investments in semiconductors, networks, cybersecurity and deep learning.
Softbank is a big investor in the three largest Asian ride-hailing companies: Singapore’s GrabTaxi Holdings Pte., India’s Ola and China’s Didi Chuxing Technology Co. On Monday, SoftBank said that it and Didi would lead a $2.5 billion fundraising round in Grab, giving the startup more ammunition in its battle against Uber across Southeast Asia.
Spokesmen from both Uber and SoftBank declined to comment.
While it is rare for SoftBank to hedge its investments, an offer could mean the company hopes Uber combines its operations with Grab and Ola, as it did last year with Didi. Such a merger would give SoftBank a formidable share of the Asian market.
Uber, which is struggling with management challenges at home and strong competition from rivals overseas, has shown a willingness to retreat from costly battles around the world. Earlier this month, it said it plans to combine its operations with Russian rival Yandex.Taxi, owned by Yandex NV.
Uber co-founder Travis Kalanick relinquished his role as chief executive last month after investors demanded he step down. His resignation followed a number of scandals as well as an investigation into sexual harassment and sexism at the company. Mr. Kalanick remains on the board.
A massive capital injection wouldn’t be out of the ordinary for Uber, which has raised more money—about $15 billion in equity and debt funding—than any other private company backed by venture capital. Uber has had to tap increasingly larger sources of capital to support its breakneck global expansion and fight fierce price wars around the U.S. The company’s losses last year totaled more than $3 billion, though it still had about $7 billion in cash on its balance sheet.
A year ago Uber turned to the Middle East for its biggest single capital infusion, a $3.5 billion investment from Saudi Arabia’s main investment fund, the Public Investment Fund. That deal handed an Uber board seat to Yasir Al Rumayyan, the managing director of PIF who also now sits on the board of SoftBank. The Saudi sovereign-wealth fund is the lead investor in SoftBank’s new $93 billion fund that is already starting to shower startups with hundreds of millions of dollars in capital.
With the Vision Fund, Mr. Son is likely to wield extensive influence on Silicon Valley and beyond through significant bets in areas such as robotics and deep learning, as artificial intelligence surpasses human capabilities. He has turned SoftBank into one of Japan’s biggest companies by making sizable investments in telecommunications, e-commerce and technology, including an early investment in Chinese internet company Alibaba Group Holding Ltd. , a gamble on U.S. telecommunications company Sprint Corp. and a buyout of U.K. Microchip designer ARM Holdings PLC.
“Many more changes are coming—I am so excited, even sleeping is a waste of time,” Mr. Son, 59, said at an event for SoftBank’s corporate clients and partners on Thursday. He compared SoftBank’s role to that of the landed elites played to enable the industrial revolution. “We want to be the gentry of the IT revolution.”
SoftBank’s big wagers have tended to greatly inflate startup valuations. The newest investment in Grab, which operates private-car, taxi, motorcycle and carpool bookings across seven countries in Asia, would value the startup at more than $6 billion, according to a person familiar with the situation. That is double the valuation from less than year ago and would make Grab the most valuable startup in Southeast Asia. SoftBank’s $5 billion investment in Didi last year catapulted the Chinese startup’s valuation to $50 billion from $33 billion.
Bloomberg News earlier reported SoftBank’s potential interest in buying shares of Uber.
Write to Greg Bensinger at email@example.com, Joann S. Lublin at firstname.lastname@example.org and Liza Lin at Liza.Lin@wsj.com
Appeared in the July 26, 2017, print edition as 'SoftBank in Talks For Stake in Uber.'