Saudi Arabia-backed SoftBank fund to invest $333m in Uber

Updated 21 April 2019

Saudi Arabia-backed SoftBank fund to invest $333m in Uber

  • Toyota has already invested $500 million in Uber as the firm races a host of other companies to develop self-driving vehicles
  • Uber is the largest of the “unicorns” or venture-backed firms worth at least $1 billion to list on Wall Street

TOKYO: Japanese car giant Toyota and the Saudi Arabia-backed investment fund SoftBank Vision Fund on Friday unveiled an investment of $1 billion in US company Uber to drive forward the development of driverless ridesharing services.
Toyota has already invested $500 million in Uber as the firm races Google-owned Waymo and a host of other companies, including major automakers, to develop self-driving vehicles.
The latest investment, which also involves Japanese parts maker DENSO, will go to Uber’s Advanced Technologies Group in a bid to “accelerate the development and commercialization of automated ridesharing,” the firms said in a statement.
Toyota and DENSO are stumping up $667 million and SoftBank Vision Fund, the investment arm of Japanese tycoon Masayoshi Son’s SoftBank, will pour $333 million into the venture.
Uber chief executive Dara Khosrowshahi said driverless cars would “transform transportation as we know it, making our streets safer and our cities more liveable.”

 

His firm is aiming to go beyond car rides to becoming the “Amazon of transportation” in a future where people share, instead of own, 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 at the arriving station to complete a journey — all using an Uber app on a smartphone.
Uber is also seeing growing success with an “Eats” service that lets drivers make money delivering meals ordered from restaurants.

The latest cash injection came a week after Uber filed official documents for its much-anticipated public share offering that is expected to be the largest in the tech sector for years.
Uber’s filing with the Securities and Exchange Commission said it operates on six continents with some 14 million trips per day and has totalled more than 10 billion rides since it was founded in 2010.
The filing contained a “placeholder” amount of $1 billion to be raised but that figure is expected to increase ahead of the initial public offering (IPO) expected in May.
The Wall Street Journal said earlier this month that Uber was seeking to raise $10 billion in what would be the largest stock offering of the year.
Media reports said the ride-hailing giant was likely to seek a market value of close to $100 billion.
Uber is the largest of the “unicorns” or venture-backed firms worth at least $1 billion to list on Wall Street, and is one of the key companies in the “sharing economy” based on offering services to replace ownership of cars, homes and other commodities.
Its revenue grew 42 percent last year to $11.2 billion but it continued to lose money from its operations. A net profit was reported for the year from a large asset sale, but operational losses were more than $3 billion.
And some analysts have voiced caution over the forthcoming IPO given a relative lacklustre debut for Lyft, the main US rival.
Khosrowshahi has promised greater transparency as he seeks to restore confidence in the global ridesharing leader hit by a wave of misconduct scandals.

 

FASTFACTS

$100bn

Size of the SoftBank Vision Fund, of which Saudi Arabia has pledged to contribute some $45 billion.


Oil up on slowing pace of coronavirus, Venezuela sanctions

Updated 20 February 2020

Oil up on slowing pace of coronavirus, Venezuela sanctions

  • Financial analysts say epidemic is likely to deal a ‘short-term blow’ to global economy

LONDON: Benchmark Brent oil prices rose for a seventh consecutive day after demand worries eased with a slowing of new coronavirus cases in China and supply was curtailed by a US move to cut more Venezuelan crude from the market.

Brent was up 71 cents at $58.46 a barrel at 1510 GMT. The global benchmark has risen nearly 10 percent since falling last week to its lowest this year. US oil was up 53 cents at $52.58 a barrel.

“Those in doubt of the economic impact from the virus should take heed from Apple’s surprise sales warning ... Put simply, this is the surest sign yet of the coronavirus fallout on the global economy,” said PVM analysts in a note.

S&P Global Ratings said it expected coronavirus would deliver a “short-term blow” to economic growth in China in the first quarter, echoing findings by the International Energy Agency.

Official data showed new cases in China fell for a second straight day, although the World Health Organization said there was not enough data to know if the epidemic was being contained.

The oil market price structure is also showing signs that prompt demand for oil is picking up, as the front-month Brent futures market is moving deeper into backwardation, when near-term prices are higher than later-dated prices.

This week, oil prices were also buoyed by a US decision to blacklist a trading subsidiary of Russia’s Rosneft, which President Donald Trump’s administration said provided a financial lifeline to Venezuela’s government.

Hopes that the Organization of the Petroleum Exporting Countries (OPEC) and allied producers would deepen supply cuts also supported prices.

The grouping, known as OPEC+, has been withholding supply to support prices and meets next month to decide a response to the downturn in demand resulting from the coronavirus epidemic.

But in the US, which is not party to any supply cut agreements, oil production has been rising. US shale production is expected to rise to a record 9.2 million barrels a day next month, the Energy Information Administration said.