With Softbank Corp.'s (SFTBY) investment in Uber Technologies Inc. finally materializing, Masayoshi Son's vertical investment strategy in self-driving cars and its horizontal expansion in global ride-sharing platforms is taking shape.
Softbank and Dragoneer Investment Group led a group that will invest in Uber, the company acknowledged Monday. While Uber did not disclose terms, the deal reportedly involves a $1 billion investment and $9 billion to purchase shares of existing shareholders.
"He's got three really key pieces of the autonomous story," 451 Research analyst Christian Renaud said of Son's growing portfolio of vertical investments in self-driving car technology.
Softbank spent $31 billion last year to buy UK outfit Arm Holdings plc, a leader in components and sensors for smart cars.
Meanwhile, the Softbank Vision Fund holds a stake in Nvidia Inc. (NVDA) that is reportedly worth $4 billion, falling just below the Securities and Exchange Commission 5% reporting threshold. Parent company Softbank transferred the stake to the Vision Fund in August.
"Nvidia does the AI bits and really, at the end of the day, autonomy is an AI problem," Renaud said.
The intersection of autonomous vehicles and ride-sharing is a grail for Nvidia founder and CEO Jen-Hsun Huang. The Nvidia boss told investors during a Thursday call that the company is working with 25 startups around the world to develop robo-taxis.
Uber, of course, is where the autonomous rubber hits the road. The company's app finds riders to fill cars today, and if Son's vision is correct will put people in robo-taxis in the coming years.
The troubled ride-hailing company has had issues amassing the technology itself for self-driving cars. Uber spent $680 million for self-driving vehicle startup Otto last year, but has been embroiled in litigation with Alphabet Inc.'s (GOOGL) Waymo unit over intellectual property.
SoftBank has made smaller investments in related technology. The company led a $169 million fundraising for autonomous-vehicle tech developer Nauto in July. The Vision Fund headed a group that invested $164 million to support Mapbox's auto-navigation and autonomous driving efforts in October.
In one sense the Uber stake caps a series of vertical investments in autonomous cars, from the sensors and A.I. behind self-driving vehicles, to the apps that let riders hail cars and the technology that ultimately will help navigate roads without drivers.
The Uber stake also represents the latest in a series of horizontal moves in the global ride sharing industry.
Softbank participated in a $2 billion funding for Indian Uber rival Ola in October. Tencent Holdings Ltd. (TCEHY) led the round, which was originally set at $1.1 billion.
Softbank and Chinese ride-sharing company Didi Chuxing invested $2 billion in Singaporean transportation and mobile payments company Grab in July. The investment followed Softbank's $100 million funding of Brazilian ride-sharing startup 99 in May, and a $5 billion stake in Didi Chuxing itself in April. Morrison & Foerster advised Softbank on investments in Didi Chuxing, Nauto and others.
Susan Mac Cormac, Noah Carr and Alex Kaufman of Morrison & Foerster LLP advised Softbank on the investment in Uber, as well as others.
Dragoneer retained Ken McVey and Ryan Purcell of Gunderson Dettmer Stough Villeneuve Franklin & Hachigian, LLP.
Benchmark hired Simpson Thacher & Bartlett LLP lawyers Atif Azher, Gary Horowitz, Eric Swedenburg, Victoria Tam and Christine Ristow, and Brad Weber of Godwin Procter LLP.
Goldman Sachs banker Gregg Lemkau advised Uber, which received counsel from Dave Peinsipp at Cooley LLP.
David Marcus contributed to this report.