With its newly reached $7.7 billion investment in Uber Technologies Inc., SoftBank Corp. (SFTBY) Chairman and CEO Masayoshi Son continues to build a global network of smart car technology, software and services.
SoftBank has stakes in companies that make chips and sensors, startups that process data to navigate self-driving cars and ride-sharing companies on multiple continents. With Son closing the long-anticipated purchase of a 15% stake in Uber, the question of who SoftBank might back next arises.
The investments are varied, but they address trends in the development of autonomous cars. "SoftBank's auto-tech investment portfolio is very diversified but the common themes are around technologies (hardware and software) enabling advanced driver-assistance systems (ADAS) and semi-autonomous and fully-autonomous driving," 451 Research analyst David Immerman said in an email.
Son's biggest bet was the $31 billion purchase of Arm Holdings plc, which makes chips and processors for cars, smart phones, healthcare applications, data centers and other markets. Arm's auto products range from parking sensors to computing platforms for autonomous vehicles.
The SoftBank Vision Fund holds about a $4 billion stake in Nvidia Inc. (NVDA) - Get NVIDIA Corporation Report , a level that falls below the Securities and Exchange Commission's 5% reporting threshold. Parent company SoftBank transferred the stake to the Vision Fund in August.
Long a force in gaming computers, Nvidia has developed the Drive PX computing platform for cars, and CEO Jensen Huang foresees fleets of robo-taxis hitting streets around the world in the coming years. Nvidia said that 25 companies are using its technology to develop fully autonomous taxis.
Son has also invested in companies that sift and crunch data that help self-driving cars navigate roads and avoid accidents.
SoftBank led a $159 million investment in Nauto Inc. in July. The Palo Alto, Calif, company develops vehicle cameras and data analytics technology to analyze drivers' behavior for automakers, vehicle fleet owners, insurers, municipalities and other clients. The company says its technology will help guide self-driving cars.
The Vision Fund headed a group that invested $164 million to support Mapbox Inc., which is developing mapping and navigation technology for autonomous vehicles, among other applications.
The stakes in Nvidia, Nauto and Mapbox bring SoftBank "directly against" Intel Corp.'s (INTC) growing stake of automotive technology following its $15.3 billion purchase of Mobileye NV this year, 451 Research's Immerman said.
SoftBank took a minority stake in San Leandro, Calif., data management software developer OSIsoft LLC in March. While OSIsoft originally served oil companies in the 1980s, it has branched into transportation and other markets.
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Uber fits into a growing network of ride-sharing groups that SoftBank has backed.
A week before announcing the Uber investment, SoftBank reportedly took part in a $4 billion investment in Chinese ride-sharing group Didi Chuxing Technology Co. SoftBank had already invested $5 billion in Didi Chuxing in the spring. Didi Chuxing bought a majority stake in Uber's Chinese operations in 2016.
SoftBank joined Tencent Holdings Ltd. (TCEHY) in a $2 billion investment in Indian Uber rival Ola, formally known as ANI Technologies Pte Ltd, in October.
SoftBank and Didi Chuxing invested $2 billion in Singaporean transportation and mobile payments company Grab Taxi Pte Ltd in July. That followed SoftBank's $100 million funding of Brazilian ride-sharing startup 99 Tecnologia Ltda in May.
SoftBank's investments in adjacent industries could benefit Son's bets in the automotive market. For instance, Softbank has a nearly 84% stake in wireless operator Sprint Corp. (S) - Get SENTINELONE, INC. Report . The carrier's network could connect Uber drivers and carry data to and from the systems that Nvidia, Arm and others are developing. Sprint CEO Marcelo Claure could take one of SoftBank's seats on Uber's board, deepening the connection between the Softbank portfolio companies.
With Son's seemingly inexhaustible supply of capital and interest in automotive tech, SoftBank's dealmaking may not be over.
"There are a few pivotal pieces of hardware that will be needed for autonomous driving, the one gaining the most buzz are LiDARs where there are an abundance of attractive investment targets," Immerman noted in regards to Light Detection and Ranging technology that guides self-driving cars. The list includes Velodyne LiDAR Inc., LeddarTech Inc., Quanergy Systems Inc., Innoviz Technologies Inc., Oryx Vision Ltd., Teledyne Optech Inc., Voxtel inc. and Novariant Inc.
Self-driving car technology developer nuTonomy Inc. is no longer available, after agreeing to sell to auto supplier Delphi Automotive PLC (DLPH) for $450 million in October. The company has trials of self-driving cars in the U.S. and Asia. Next year, nuTonomy plans to launch a an on-demand service in Singapore, where SoftBank backs Grab.
"There are a crop of self-driving systems startups," Immerman noted, pointing to companies such as DeepScale, Drive.AI, NAVYA Technology Corp. and Civil Maps. "[A] move here for SoftBank is less likely given Uber's own commitment to autonomous driving through its ride sharing services, advancements of internal and acquired [autonomous vehicle] divisions and recent purchase of 24,000 Volvo XC90s retrofitted for autonomy," the analyst suggested.
SoftBank reportedly held talks with Zoox Inc. in September. Menlo Park, Calif.-based Zoox is developing electric self-driving cars and deploys technology by SoftBank-backed Nvidia. CEO and co-founder Tim Kentley-Klay is such a fan of the Drive PX platform that Nvidia quoted him in a press release.
MIT spin-off Optimus Ride also deploys Nvidia's technology. In late November, the company announced a partnership with a Boston area real estate developer to provide autonomous vehicles to shuttle residents around a 1,550-acre urban development.
Forecasting Son's next move is difficult because SoftBank's portfolio spans the globe and ranges from minority stakes in niche startups to controlling positions in companies such as Sprint and ARM Holdings.
Loup Ventures analyst Austin Bohlig suggested that SoftBank could double down on robotics, AI and autonomous driving.
With self-driving cars due to hit the roads and connect to wireless networks in greater numbers, Son is not likely done with disruptive automotive technology and business models.
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