SoftBank has used competing rideshare investments to increase valuations by convincing its portfolio companies to stop costly fighting. Perhaps they expect to have a similar need once self-driving companies are also competing for rides.
There are funds that invest in a wide portfolio of energy companies, or other markets. It's making a bet on self driving cars without picking winners. I suppose it is picking incumbents generally, but that's hard to avoid.
I dunnno if it's a good strategy, but it's not an ilogical one.
I beg to differ. In Southeast Asia for example, Softbank invested in both Uber and Grab, the two of its biggest ride sharing companies. Having leverage in both, Uber then was shut down in favor of Grab ultimately eliminating competition. Doesn't seem like a weird investment strategy at all.
And how has that turned out for everyone? Are customers happy? Has it led Grab to be profitable now? Is Softbank getting returns for their billions of Uber AND Grab investments or do they have to invest even more billions?
Does anyone know what's happening at Toyota ? They Gil Pratt (from DARPA/CMU?) leading TRI in SV, Boston (and now apparently in Tokyo). They have a TTI in Nagoya, have $100 M in PFN, and have an in-house autonomous driving effort. ...
Yet, they invest $500+660m (with Denso) in what is empirically proven to be a reckless team in Pittsburgh.
I wonder how much of all uber investment is actually an investment in self driving cars, and uber's ability to get a big piece of that.
Uber's q4 revenue was $3bn ($1bn loss)
Lets say they triple revenue to $40bn pa in 10 years, while growing into profitability... call it 10% profit margin over the 10 yr period... it'd be impressive, considering margin is currently negative 30%.^
That makes <$30bn profit in 10 years. Uber's IPO valuation is estimated around $100bn.
In any case, lets also say you believe L5 self driving will be rolling out by 2030. Uber seems to. At this point, the current business model (uber of driving) starts declining. Self driving is the only obvious replacement.
You really need to expect very big things from uber in the self driving space. If self driving is coming, there isn't time to make money from the current business model. If it isn't, uber is betting on the wrong things.
^You could assume even faster growth but given their current losses, size limitations, etc... it starts getting beyond optimism to expect any profit. This isn't google or fb. Uber have competition.
"For example, we believe that autonomous vehicles will be an important part of our offerings over the long term, and in 2018, we incurred $457 million of research and development expenses for our ATG and Other Technology Programs initiatives."
$457mn in 2018, $384mn in 2017, $230mn in 2016.
"On a quarterly basis, research and development expenses have varied based on the timing of our investments associated with ongoing improvements to, and maintenance of, our platform offerings, and ATG and Other Technology Programs. Research and development expenses have increased in all quarters with the exception of the fourth quarter of 2018, when investments in ATG were delayed until 2019."
Is Softbank just going to invest in every self-driving startup? That seems like a really weird investment strategy.
SoftBank has used competing rideshare investments to increase valuations by convincing its portfolio companies to stop costly fighting. Perhaps they expect to have a similar need once self-driving companies are also competing for rides.
Sounds dangerously like a trust.
Why Wierd?
There are funds that invest in a wide portfolio of energy companies, or other markets. It's making a bet on self driving cars without picking winners. I suppose it is picking incumbents generally, but that's hard to avoid.
I dunnno if it's a good strategy, but it's not an ilogical one.
At least one guess is that this helps Softbank increase the value of its other investments in Uber: https://www.bloomberg.com/opinion/articles/2019-03-14/don-t-...
I beg to differ. In Southeast Asia for example, Softbank invested in both Uber and Grab, the two of its biggest ride sharing companies. Having leverage in both, Uber then was shut down in favor of Grab ultimately eliminating competition. Doesn't seem like a weird investment strategy at all.
And how has that turned out for everyone? Are customers happy? Has it led Grab to be profitable now? Is Softbank getting returns for their billions of Uber AND Grab investments or do they have to invest even more billions?
VCs invest in competitors all of the time in order to hedge risk. It only takes one to 10x and make it worthwhile.
In unsaturated markets, the increased buzz of competition also helps with growth.
It's not any weirder than buying an index fund.
Don't index funds generally spread across more than one type of business? At least to a broader category.
Nah, its probably a consolidation strategy
Does anyone know what's happening at Toyota ? They Gil Pratt (from DARPA/CMU?) leading TRI in SV, Boston (and now apparently in Tokyo). They have a TTI in Nagoya, have $100 M in PFN, and have an in-house autonomous driving effort. ...
Yet, they invest $500+660m (with Denso) in what is empirically proven to be a reckless team in Pittsburgh.
There's evidence that they were a reckless team. There's no evidence that they are a reckless team.
I wonder how much of all uber investment is actually an investment in self driving cars, and uber's ability to get a big piece of that.
Uber's q4 revenue was $3bn ($1bn loss)
Lets say they triple revenue to $40bn pa in 10 years, while growing into profitability... call it 10% profit margin over the 10 yr period... it'd be impressive, considering margin is currently negative 30%.^
That makes <$30bn profit in 10 years. Uber's IPO valuation is estimated around $100bn.
In any case, lets also say you believe L5 self driving will be rolling out by 2030. Uber seems to. At this point, the current business model (uber of driving) starts declining. Self driving is the only obvious replacement.
You really need to expect very big things from uber in the self driving space. If self driving is coming, there isn't time to make money from the current business model. If it isn't, uber is betting on the wrong things.
^You could assume even faster growth but given their current losses, size limitations, etc... it starts getting beyond optimism to expect any profit. This isn't google or fb. Uber have competition.
"For example, we believe that autonomous vehicles will be an important part of our offerings over the long term, and in 2018, we incurred $457 million of research and development expenses for our ATG and Other Technology Programs initiatives."
$457mn in 2018, $384mn in 2017, $230mn in 2016.
"On a quarterly basis, research and development expenses have varied based on the timing of our investments associated with ongoing improvements to, and maintenance of, our platform offerings, and ATG and Other Technology Programs. Research and development expenses have increased in all quarters with the exception of the fourth quarter of 2018, when investments in ATG were delayed until 2019."
Well, at least Softbank are helping to fire up innovation.
Softbank is EVERYWHERE
Automation will slowly start to creep into most industries. But how safe could this actually be?
Who else have they invested in?
Oof. I'm no expert, but: https://www.nakedcapitalism.com/wp-content/uploads/2019/04/S...