Market Insights

Not Just Uber: Where SoftBank Is Putting Its Investment Dollars

The Japanese telecommunications giant SoftBank appears to be gearing up for a hefty investment in Uber, as the conglomerate shifts focus to fields including ride-sharing services like Uber as well as commercial real estate.

Uber struck a preliminary deal Sunday with a group of investors led by SoftBank that could be worth up to $10 billion and give the investor group about 14% of the company, news reports said. However, SoftBank, which has already invested in ride-hailing companies in China and India, has cautioned that the deal is “by no means” certain. If it goes through, the deal could pave the way for Uber to go public by 2019.

Led by CEO Masayoshi Son, SoftBank has taken steps recently to shift from telecom to technology in a broader sense, as well as to commercial real estate.

The Japanese conglomerate invested $4.4 billion in coworking company WeWork in August, and $3.3 billion in management firm Fortress Investment Group in February – though that deal, expected to close by the end of the year, has been held up for months by regulators in Washington.

Fortress is a player in the commercial real estate world, issuing loans of upwards of $100 million (CrediFi took a look earlier this year at its apparent efforts to increase its loan yield). Other SoftBank CRE investments include OYO, the Indian hotel room aggregator, which recently closed a $250 million Softbank-led round of investment. Both the Fortress and OYO investments come from SoftBank’s $100 billion Vision Fund, a massive technology investment fund that goes hand in hand with Son’s pledge last year to invest billions of dollars in the U.S. and create 50,000 new jobs there.

The market seems to be displaying confidence in SoftBank, which began recovering last year from a drop in 2013. Its share price has risen steadily since early last year, rising 80% in that time, to $42.57 Monday.

As SoftBank expands its focus, it will be interesting to see what kind of role the Japanese conglomerate will play in industries like ride-hailing services and commercial real estate.

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