SoftBank-Uber deal may foster global ride-hailing alliance
Irshad Salim — Japan’s SoftBank Group is finalizing details of a deal that could see the aggressive tech-space investor pay more than $10 billion that would be led by its $93bn Vision Fund along with other investors– including Saudi Public Investment Fund, for a large stake in Uber Technologies.
SoftBank has also been a big backer of almost all of Uber’s rivals, including Didi Chuxing in China, Ola in India, Grab in Singapore, and 99 in Brazil.
According to reports, Saudi Arabia’s Public Investment Fund, which made headlines last year by investing $3.5bn in Uber, is one of the biggest backers of the SoftBank Vision Fund; the PIF’s chief executive Yasir Al Rumayyan sits on the boards of Uber and SoftBank, report The Financial Times.
Nikkei Asian Review report that the parent company of a major Japanese mobile carrier is looking to invest hundreds of million dollars or more in the world’s leading ride-hailing service through SoftBank’s 93 billion dollar investment fund established with Saudi Arabia and others.
The suitor is said to have already presented detailed investment terms to Uber shareholders. It is said to be seeking to obtain a roughly 20% interest in the U.S. company,.
Uber, whose stock is yet to be listed on a bourse, was once valued at more than $70 billion, but its estimated corporate value has since diminished due to turbulence in its leadership team. SoftBank appears to be swooping in to take advantage of this value readjustment amid reports that on Friday London declined to renew the ride-hailing company’s license to operate in the city, its largest European market.
Transport for London, the agency that oversees the city’s subways, buses and taxicabs, declared that Uber was not sufficiently “fit and proper.” The designation carries significant weight in Britain.
Over the past few years, Uber has been temporarily forced out of a few major markets, like Delhi in India and Austin, Tex. Uber also voluntarily left China after selling its business there to a rival, Didi Chuxing. But it had never been told to leave a market as important as London.
If the deal with Uber goes through, SoftBank probably will move toward creating a global ride-hailing alliance by promoting cooperation among those companies it has already invested in the Asian ride-hailing market.
Max Wolff, chief economist at Disruptive Technology Advisers (DTA), told FT he expects consolidation across the car-booking business to continue. “The barrier to entry isn’t super high, but the market scale and scope required for profitability is really high.” “So that means you have to have consolidation.”
Meanwhile, more than 400,000 Londoners have signed petition to save Uber as the firm hits back at the London ban.
The campaign Save Your Uber in London was set up by the ride-sharing firm on the Change.org website after it was announced on Friday that it would not have its licence renewed when it expires on 30 September.
The petition had gained more than 426,000 signatures by Saturday morning as the company tweeted users to sign up.