SoftBank’s Vision Fund could be about to make its biggest investment yet: into the food delivery startup DoorDash.
According to Recode, the Japanese tech conglomerate is preparing to invest $300m into DoorDash, which competes with the likes of GrubHub and UberEats in the US.
However, its DoorDash’s competitors that could stop the deal going through. As SoftBank is still going through its tender offer to acquire up to 20 percent of Uber, UberEats’s owner, this could prevent the investment in DoorDash from proceeding.
Why is SoftBank such a big investor?
SoftBank has developed a reputation for spending large amounts of money of highly-valued tech startups around the world, from China to India and the US.
Last year it hit the headlines in the UK when it announced it was spending $32bn on chip developer ARM, not long after the UK voted to leave the European Union.
It will soon be launching a $100bn technology fund, with backers including iPhone maker Apple and Saudi Arabia in order to carry on this spate of investments.
The company’s chief executive Masayoshi Son said this week that talks had begun with about 30 companies on potential investments from its Vision Fund.
Here are some of the recent investments from the Japanese giant you should know about.
In May, it was revealed that SoftBank was investing in the London-based virtual reality (VR) startup Improbable, in one of the UK’s largest venture capital deals.
The valuation hasn’t been disclosed but SoftBank is leading a $502m investment round and buying a non-controlling stake in Improbable – which means the gaming startup’s value is worth at least $1.04bn according to Bloomberg calculations.
Softbank’s managing director of investments, Deep Nishar, said in a statement:
Improbable is building breakthrough technologies that are becoming vital and valuable platforms for the gaming industry. Beyond gaming, this new form of simulation on a massive scale has the potential to help us make better decisions about the world we live in. Improbable’s technology will help us explore disease, improve cities, understand economies and solve complex problems on a previously unimaginable scale.
As well as being used in gaming, the UK government has used Improbable’s software, called SpatialOS. This creates a simulation of the whole internet to look for bottlenecks and points of vulnerability to help better guard against cyber attacks.
2. Didi Chuxing
Over in China, SoftBank has agreed to invest $5bn in the ride-hailing firm Didi Chuxing, which values the so-called Uber of China at more than $50bn.
Didi confirmed this new investment round in April, saying that the finance would be continued global expansion and deeper investment in areas such as artificial intelligence (AI) to bring advanced systems to its transportation service.
You may remember Didi from headlines last August when it acquired Uber’s Chinese division.
It now claims to have 400m users across 400 cities.
Despite the many, many problems the ride-sharing startup has faced this year, SoftBank invested at least $1bn into the company. As well, the deal will see up to $9bn worth of Uber shares purchased from existing investors.
SoftBank won’t be the only purchasers, however. The investment includes funding from Dragoneer and General Atlantic.
Uber said in a statement:
“We’ve entered into an agreement with a consortium led by SoftBank and Dragoneer on a potential investment. We believe this agreement is a strong vote of confidence in Uber’s long-term potential.”
The startup said it will use the funds to invest in technology and expansion in the US and abroad.
The investment was an interesting one for SoftBank to make. It has heavily invested in Uber’s Asian rivals, including Ola and Grab.
Bloomberg reported that the deal could be the largest private stock sale ever and make a lot of early employees of Uber millionaires if they sell their shares.
Paytm is the country’s largest digital payments provider and the deal would value the company at about $7bn.
The company benefited from prime minister Narendra Modi’s monetisation decision last November.
Within hours of the announcement, the startup saw a 1,000 percent surge in money added to customers’ digital wallets.
Not all of SoftBank’s Indian investments are paying off though
Alongside its proposed investment in Paytm, SoftBank has been facing some issues with its other Indian investments.
Earlier this year, it was announced that it has lost around $1.41bn in investments in India. This is mainly because of the troubles Snapdeal has been facing recently.