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Ride-hailing is key investment for SoftBank fund: Masayoshi Son

Founder says Uber, Didi, Grab and Ola likely to seek listings in near future

Masayoshi Son said his strategy to invest small stakes in world's top companies has worked well.   © AP

TOKYO -- Japan's SoftBank Group is moving stakes it holds in ride-hailing companies including Uber Technologies, Singapore's Grab and China's Didi Chuxing into its Vision Fund, consolidating its control over these companies.  

Chairman and CEO Masayoshi Son revealed the plans Wednesday. The group bought a 15% stake in Uber in January this year. Stakes in ride-hailing services were previously kept apart from the Vision Fund, which was set up in 2017, backed by Saudi Arabia's sovereign fund, Public Investment Fund.

PIF, which already held a 5% stake in Uber, did not allow Vision Fund to invest in other competing ride-hailing services. SoftBank had invested in Grab and India's Ola prior to setting up the Vision Fund in 2014. Last year, SoftBank bought a stake in Didi through a separate SB Delta fund.

By transferring the 15% Uber stake to Vision Fund, "we become the largest shareholder of Uber, instead of being its competitor," Son said. Didi bought Uber's China operations in 2016. In return, Uber got a 17.7% stake in Didi. 

SoftBank and PIF have reached a basic agreement to move all ride-hailing stakes to Vision Fund, since "there would be no conflict of interest that way."

Looking ahead to the second year of the 10 trillion yen ($91 billion) Vision Fund, Son seemed content with its progress. While it invests in a variety of fast-growing startups such as India's Flipkart, which it announced it would divest at a huge profit on Tuesday, and U.S. co-working space WeWork, "ride-hailing will be especially big from now on," Son said.

"Ride-hailing would transform the whole industry power structure," Son said. Total revenue made by the four ride-hailing companies amounted up to $65 billion, growing at the pace of 100% on average every year. He added that SoftBank was now the largest shareholder in the industry, and that he expected all the companies to seek initial public offerings in the near future.

During the press conference, Son emphasized what he called "group strategy" or "strategic holding company." It is to invest in independent brands that are "the world's No.1 in their categories." He said that 20% to 30% stakes were the so-called sweet spot for investment rather than over 51%.

Son said this was the central idea behind his approval of the merger of Sprint and T-Mobile, and the planned listing of the group's core unit SoftBank Corp.

The company's net operating profit for the fiscal year was 1.3 trillion yen, 27% up from the previous year.

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