SoftBank Is Raising An Army To Take On Uber

The company is investing heavily on localized taxi apps in order to take on Uber, claiming that they form a key component of e-commerce

The world’s second most valuable startup Uber (valued at $41 billion) is on a global expansion drive, but there are other forces at play that could hinder the San Francisco-based company’s growth.
Oddly enough, it’s telecom giant SoftBank that’s raising an army to take on Uber, and nowhere is this trend more evident than in India. The Japanese firm has pledged to invest $10 billion in Indian startups over the next few years, with one of the stars in its portfolio being taxi-hailing service Olacabs.
With India being one of Uber’s prime growth markets, Olacabs is looking to turn the tables by acquiring rival TaxiForSure, rapidly expanding its market share and more importantly making it harder for Uber to grow. The deal is valued at $450 million, the funds for which should come from the $210 million SoftBank invested in Ola last year, and the $500 million the company plans to raise soon.
Uber vs SoftBank Geography
Just last year we got to see two players in the Indian e-commerce space join hands in order to take on a global giant. Flipkart acquired fashion discovery site Myntra for close to $300 million, which was seen as a move to ward off an attack from US giant Amazon.
Softbank’s efforts to counter Uber’s growth don’t just end in India. The firm has also invested $250 million in South-East Asia-based GrabTaxi and recently led a $600 million funding round for China’s Kudai Dache.
The other twist in the tale is Chinese e-commerce giant Alibaba leading US taxi hailing service Lyft’s $250 million funding round. Lyft is probably best known for being Uber’s biggest stateside rival, and is the star in Alibaba’s North American portfolio.
Given SoftBank and Alibaba’s close ties (SoftBank being a famous early investor in Alibaba) it isn’t too farfetched to think that Lyft could be a prime part of SoftBank’s taxi-app focus. Maybe the Japanese firm will put its money into Lyft at some point of time, or could just form an alliance with it for the common goal of keeping Uber’s growth in check.
SoftBank wants to take on Uber and is doing so by investing in localized taxi-hailing companies who inturn are looking to ward off attacks from Uber. On a more grand scale however, SoftBank believes that taxi apps form a key component of e-commerce and with investments in companies like Snapdeal, we could see a lot of synergies being formed between these players in the future.
Integrations between services could be as small as promoting each other’s apps within their own or sharing the same wallet based payment system, to the learnings from taxi services being used to setup more efficient logistics networks. While SoftBank won’t divulge on any information about plans for its portfolio companies, it does acknowledge that it is looking to maximize synergies between the many internet companies in which it has invested across the world.

Sign Up for NextBigWhat Newsletter