SoftBank is selling a large chunk of its stake in ride-hailing group Uber as the world’s most aggressive technology investor wrestles with heavy losses from its other big bet on China’s Didi Chuxing, according to two people familiar with the matter.
The Japanese conglomerate behind the $100bn Vision Fund will aim to sell about 45m of its shares in Uber, said one of the people, which stood at 184m after it sold 38m of Uber shares for about $2bn in January. The other person said more shares were offloaded in June and the latest transaction would take SoftBank’s holding below 100m shares.
SoftBank’s investment in Uber dates back to 2017 when it agreed to pay about $7.7bn for 15 per cent of the US group’s shares, although the stake was later transferred to the Vision Fund.
Following Uber’s initial public offering in 2019, the fund has carried out several divestitures, taking its stake in Uber to less than 10 per cent as of the end of June, according to Financial Times calculations.
One person with knowledge of the transaction said the latest sale was unrelated to China’s recent regulatory crackdown on ride-hailing group Didi, which at one point put the Vision Fund’s investment $4bn in the red. Another person said the sale was decided after a collapse in Didi’s share price this month.
The news, which was first reported by CNBC, sent shares in Uber down 4 per cent in post-market US trading. SoftBank’s stock briefly rose 3 per cent during Tokyo trading on Thursday.
Following a blockbuster quarter for the Saudi Arabia-backed $100bn Vision Fund and its $40bn sequel fund during the first three months of the year, SoftBank’s fortunes have reversed with its investments in China hit hard by the country’s regulatory crackdown on the tech sector.
According to estimates by Redex Research Advisory, the value of the two Vision Funds’ listed holdings is down $11bn since the start of the quarter that began in July compared to a gain of $1.1bn in the April to June quarter.
“SoftBank has been touting [the] Vision Fund’s IPO flywheel, and four of the last six listings have been Chinese, but that will fade as the reality of China’s crackdown sinks in,” Kirk Boodry, a tech analyst at Redex, said.
Didi’s market value at one point fell to 50 per cent of its post-IPO peak after Chinese regulators announced a data security investigation into the company following its New York listing earlier this month. The Vision Fund is the biggest shareholder in Didi with a 20.1 per cent stake, while Uber also owns a 12 per cent stake in the Chinese group.
Days after initiating the Didi probe, China’s cyber space regulators turned to scrutinising Vision Fund-backed logistics group Full Truck Alliance, causing its US-listed shares to tumble.
Most recently, the Vision Fund’s investments in Chinese online education companies such as Zhangmen, Zuoyebang and VIPThink have been overshadowed by new regulations that will ban companies that teach school curriculum subjects from making profits.