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Disrupting the disruptors
As we noted in a recent issue of the daily CB Insights newsletter, SoftBank’s 2017 rampage through tech investing circles shows no signs of slowing.
Armed with its $93B Vision Fund, SoftBank has been pouring capital into startups across the board, with its self-stated goal of creating a “global mobility ecosystem” especially apparent:
Of course, SoftBank has secured large stakes across global ride-hailing and transportation network companies over the years, and is now looking to buy into the largest player in Uber (along with Dragoneer and other investors; see last week’s Uber Strategy Teardown for more).
But SoftBank’s mobility ambitions aren’t just limited to ride-hailing; the company has its own AV joint venture (SB Drive), co-led Nauto‘s $159M Series B, and is now in talks to back robotaxi startup Zoox.
It’s not yet clear whether SoftBank will secure stakes in both Zoox and Uber (Benchmark now is resisting the latter deal). However, if both deals were to go through, the investor would then have overlapping interests within contested ride-hailing markets (like Uber and Grab in Southeast Asia), as well as stakes in multiple competing AV developers.
In such a case, SoftBank could be content as a passive investor with diversified bets in the mobility space, but it could also agitate for consolidation and/or the drawing down of redundant efforts in both the ride-hailing and AV spaces.
Either way, SoftBank’s deep pockets could be a boon to these mobility companies, who are often hungrier for capital than the average tech startup (and also likely face longer roads to monetization and profitability).
Speaking of Zoox, the startup is known for not just its billion-plus valuation but also the relative secrecy of its operations.
However, the company is notable for its radical vehicle concepts, being one of the few AV developers working to reimagine the vehicle itself in addition to fielding an autonomous driving system.
Partially autonomous systems are still a major point of contention; worries around distracted human supervisors in such systems were amplified following a fatal crash involving Tesla’s Autopilot system in May 2016.
Although some developers believe transitioning directly to full autonomy is a safer solution, notable AV figures such as Gill Pratt of Toyota Research Institute and Chris Urmson of Aurora have been emphasizing that that level of automation may take decades to achieve.