SoftBank funding may spur Uber to rethink SE Asian market
SINGAPORE (Reuters) – SoftBank Group’s multi-billion dollar investment in Uber Technologies Inc. opens up the possibility of combining it with other ride-hailing assets the Japanese group owns in a consolidation of a rapidly growing business across Asia, industry sources say.
Uber Technologies Inc. said on Nov. 12 that a planned deal with a consortium led by SoftBank and Dragoneer Investment Group was moving forward. The consortium plans to inject $1 billion to $1.25 billion into Uber, and buy up to 17 percent of existing shares in a secondary transaction.
SoftBank has also been a big investor in Uber’s rivals across Asia, including Southeast Asia’s Grab, China’s DiDi Chuxing, and India’s Ola, as it works to achieve founder Masayoshi Son’s vision of a future driven by artificial intelligence and interconnected devices.
At the same time, ride-hailing companies have been competing fiercely across Asia to attract both riders and drivers, with discounts and promotions that have driven down profit margins.
“SoftBank will play a consolidating role,” said a source close to Singapore- based Grab. “SoftBank as a board director in both companies (Uber and Grab) would fundamentally change the conversation.”
The source declined to be named due to sensitivity of the subject.
SoftBank and Grab declined to comment for this story.
At $68 billion, Uber is the most highly valued venture-backed company in the world. But the lofty valuation has come at the cost of a heavy hit to Uber’s bottom line, which the firm has said was necessary to establish itself in new markets.