Uber Technologies Inc. is at risk of losing out on another big chunk of the global market.Also at Bloomberg, yesterday:
Grab, the leading provider of ride-hailing services in Southeast Asia, said Monday it raised $2 billion from Japan’s SoftBank Group Corp. and China’s Didi Chuxing and expects to receive another $500 million from new and existing backers. The money will help Grab, which already dominates the region, defend its turf against Uber in one of the San Francisco company’s most important global markets after retreats from China and Russia.
Uber’s rivals are piling on a company in crisis. While a series of scandals at Uber culminated in the ouster of Chief Executive Officer Travis Kalanick in June, its competitors in China, India, Brazil and Singapore have raised a total of about $9 billion to accelerate their expansions. The money, primarily from Masayoshi Son’s SoftBank, jeopardizes Uber’s push for global dominance and its $69 billion valuation.
“This funding round is a great threat to Uber,” said Zhou Xin, an internet consultant at Beijing-based Trustdata.“If Uber loses Southeast Asia, it will significantly curtail its value proposition as a global operation.”
International markets have proven brutal. Uber sold its business in China to Didi after a fierce battle that saw each company burning through more than a billion dollars a year at one point as they fought for drivers and riders with rich subsidies. Uber negotiated a similar move in Russia this month as it seeks to narrow losses.
Now, Uber is trying to compete with its leadership in turmoil. Kalanick stepped aside after a lawsuit by Alphabet Inc.’s Waymo over trade secrets, a U.S. criminal probe over a software tool for evading regulators and an investigation into alleged sexual harassment and discrimination. Several lieutenants, including ally Emil Michael, have also left.
"Uber is serving millions of riders and and drivers in over 55 cities across Southeast Asia, and is expanding rapidly to meet strong demand for ridesharing and food delivery,” the company said in an e-mailed statement. “With positive regulatory momentum behind the industry in the region, we are continuously investing in the app and talented local teams to ensure the very best experience for everyone, everywhere we operate."
SoftBank’s Son is emerging as the primary financier behind the anti-Uber alliance. In April, he led a $5.5 billion investment in Didi aimed at giving the Chinese ride-hailing startup a war chest to invest in new technologies and foreign expansion. SoftBank also sprinkled money into Brazil’s largest ride-sharing startup 99 and India’s Ola, and is in discussions to back Uber’s U.S. competitor Lyft Inc, people familiar have said.
“SoftBank missed the chance to invest in Uber before it became the leading ride-sharing platform in the U.S.,” said Masahiko Ishino, an analyst at Tokai Tokyo Securities. “Other regional ride-sharing companies still need capital to get up to speed.”...MORE
SoftBank, Didi Hand $2 Billion to Uber's Biggest Asian Rival