Telecommunications and internet group SoftBank wants to invest in one of Uber and Lyft, the two market leaders in the US on-demand lift sector, CEO Masayoshi Son said yesterday.
Son revealed the news in SoftBank’s Q1 2017 earnings call, revealing that the firm wants to enter the sector through an investment in a US-based company and is open to discussions with both. A report last month suggested it was considering a multi-billion dollar investment in Uber.
Uber is the overwhelming market leader in the US online ride ordering sector while Lyft is a comfortable second, though the former is in a rough patch following the ousting of co-founder Travis Kalanick as CEO and the latter recently reached 1 million rides per day.
SoftBank is already an investor in ride hailing platforms in China (Didi Chuxing), India (Ola), Southeast Asia (Grab) and Brazil (99) but is yet to invest directly in a US-based service, though its newly acquired asset management subsidiary Fortress Investment Group owns a small stake in Lyft.
Son held talks with Uber executives last month over a prospective deal in which it would buy shares from investors including venture capital firm Benchmark at a valuation of between $40bn and $45bn, and invest $1bn in new shares at a $70bn valuation, The Information has reported.
The deal would also involve SoftBank taking at least one board seat in the process, though internal sources told The Information they felt a deal was unlikely because of the lack of a CEO and the fact Uber investors would probably view the secondary valuation as too low.
Uber was valued at $62.5bn as of June 2016 and has reportedly raised more than $11.5bn in debt and equity financing from an investor base that includes corporates Alphabet, Didi Chuxing, Microsoft, Times Group and Tata and Sons.
Lyft has meanwhile received more than $2.1bn in funding from backers including Didi Chuxing, carmakers General Motors and Jaguar Land Rover, and e-commerce firms Alibaba and Rakuten, and was valued at $7.5bn as of its $600m series G round in April this year.