TOKYO • Japanese car giant Toyota and investment fund SoftBank Vision Fund yesterday unveiled an investment of US$1 billion (S$1.4 billion) in United States firm Uber to fuel the development of driverless ride-sharing services.
The latest cash injection, expected to close in the third quarter of this year, came amid fevered anticipation of Uber’s initial public offering (IPO), which is expected to be the tech sector’s largest in years.
Toyota has already invested US$500 million in Uber, which is racing Google-owned Waymo and a host of other companies, including major carmakers, to develop self-driving vehicles.
The latest investment, which also involves Japanese parts maker Denso, will go to Uber’s Advanced Technologies Group to “accelerate the development and commercialisation of automated ride-sharing”, the firms said in a statement.
SoftBank Vision Fund, the investment arm of Japanese tycoon Masayoshi Son’s SoftBank, will pour US$333 million into the venture. SoftBank is Uber’s biggest shareholder, holding 16 per cent.
Toyota and Denso are stumping up a combined US$667 million. The Japanese car firm said it would also contribute another US$300 million over the next three years to help cover related costs.
Uber chief executive Dara Khosrowshahi said driverless cars would “transform transportation as we know it, making our streets safer and our cities more liveable”.
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42%
Rise in Uber’s revenue last year to US$11.2 billion. The company reported a net profit from a large asset sale, but also made operational losses of more than US$3 billion.
The firm aims to go beyond car rides to become the “Amazon of transportation” in a future where people share, instead of own, their vehicles.
If all goes to plan, commuters could ride an e-scooter to a transit station, take a train, then grab an e-bike, share a ride or take an e-scooter from the station to complete a journey – all using the Uber app on a smartphone.
Uber is also seeing growing success with an Eats service that lets drivers make money delivering meals that customers order from restaurants.
Last week, Uber filed official documents for its much-anticipated IPO. The filing with the US Securities and Exchange Commission said Uber operates in six continents with some 14 million trips per day and more than 10 billion rides completed since it was founded in 2010.
The filing contained a “placeholder” amount of US$1 billion to be raised, which may increase ahead of the IPO expected next month.
The Wall Street Journal said earlier this month that Uber was seeking to raise US$10 billion in what would be the biggest stock offering of the year.
Media reports said the ride-hailing giant was likely to seek a market value of close to US$100 billion.
Uber is the largest of the “unicorns”, or venture-backed firms worth at least US$1 billion, to list on Wall Street. It is one of the key companies in the “sharing economy”, which is based on offering services to replace ownership of cars, homes and other commodities.
Uber’s revenue grew 42 per cent last year to US$11.2 billion. It reported a net profit from a large asset sale, but also incurred operational losses of more than US$3 billion.
Some analysts have voiced caution over the forthcoming IPO, given the relatively lacklustre debut of Lyft, Uber’s main US rival.
Mr Khosrowshahi has promised greater transparency as he seeks to restore confidence in the ride-sharing leader, which has been hit by a wave of misconduct scandals.
In October last year, Toyota and SoftBank announced a joint venture to create a “new mobility service”, including driverless vehicles for services such as meal deliveries.
The company – called “Monet”, short for “mobility network” – is majority owned by SoftBank.
SoftBank started as a software firm but has been pushing into investments under the leadership of Mr Son, one of Japan’s richest men.
AGENCE FRANCE-PRESSE