Japanese tech giant SoftBank said Tuesday there has been “no final agreement” on a potential $10 billion investment in Uber Technologies. On Sunday, Uber had said the deal with SoftBank and Dragoneer Investment Group was moving forward.
"After a long and arduous process of several months it looks like Uber and its shareholders have agreed to commence with a tender process and engage with SoftBank. By no means is our investment decided. We are interested in Uber but the final deal will depend on the tender price and a minimum percentage shareholding for SoftBank,” said Rajeev Misra, CEO of SoftBank Investment Advisors and a Board Director of SoftBank Group.
“If conditions on share price and a minimum of shares are not satisfactory for the SoftBank Group side, there is a possibility the SoftBank Group may not make an investment,” the statement added.
SoftBank and Dragoneer are leading a consortium that plans to invest up to $1.25 billion in the ride hailing company. This will be followed by a secondary transaction, with a purchase of up to 17 percent of existing shares being discussed.
Uber views India as its second-biggest market after the United States. It currently operates in about 30 Indian cities and competes with Ola, a ride hailing service that’s already backed by SoftBank. The Japanese company has invested in several Asia-based ride-sharing firms, including Ola and China’s Didi.
The Asia-Pacific region leading the market in terms of size, according to a recent market research report on the ride hailing market. High population and increasing urbanization are the key contributing factors behind this growth.
Increasing urbanization leads to traffic congestion and increasing population will also increase the demand for different mobility options in urban areas. Ride hailing services like app-based taxi services, car sharing services, and station based mobility in Asia-Pacific region flourish on the grounds of increasing population of urban areas.
The report says the market will grow at a CAGR of 19.81% during the forecast period, to reach USD 276 billion by 2025.
Despite this assessment, Uber has struggled in Southeast Asia. Chief Executive Dara Khosrowshahi recently spoke about this.
“The economics of that market are not what we want them to be,” Khosrowshahi said. “I think it’s over-capitalized at this point. We’re going in, and we’re leaning forward. But I‘m not optimistic that market is going to be profitable any time soon.”
Stay up-to-date with the latest trending news stories and industry advances with the Research and Markets blog. Don’t forget to connect with us on LinkedIn and Twitter for the latest blog plus information about new products.