Uber, OYO's valuation gains boost SoftBank’s FY19 operating profit

SoftBank has been a key investor in ride hailing companies across the US, China, South-East Asia and India giving it a dominant market share.

Japanese conglomerate SoftBank Group, which is one the biggest investors in the Indian startup ecosystem, saw its operating profit for the year ended March lifted by valuation gains from its investments in companies like OYO and Uber.

SoftBank's operating profit for the year ended March rose 80.5 percent to 2.4 trillion yen ($22 billion) driven by its tech investments. SoftBank has been investing globally in various startups, primarily through its $100 billion vision fund.

SoftBank Group CEO Masayoshi Son

Also read: Softbank plans to IPO its $100 billion Vision Fund this year: report

According to SoftBank, the value of Vision Fund’s investments in 69 companies rose to $72.3 billion at the end of March from its $60.1 billion acquisition cost, driven by gains at companies such as Uber and OYO.

SoftBank stands to make substantial gain from its stake in Uber, which will go public on Friday. Uber is likely to be valued at around $80 billion, and SoftBank has earned an valuation gain of 418 billion yen from its stake in the ride hailing company.

In case of OYO, SoftBank recorded a valuation gain of 154.2 billion yen. The Japanese company first invested in OYO in 2015, and has participated in various rounds of funding to turn this hotel room aggregator into a unicorn.

Now, SoftBank is contemplating a possible initial public offering for its $100 billion vision fund, in which Saudi Arabia holds 45 percent stake. The Japanese conglomerate is also looking at a second vision fund.

The Vision Fund holds 69 investments with Uber being the single biggest segment. It has also invested more than $10 billion in China’s Didi Chuxing, $3 billion into Grab, a leading service provider in South East Asia and $2.25 billion in General Motors’s self driving unit Cruise. In India, SoftBank is also an investor in ride hailing company Ola.

According to SoftBank Group CEO Masayoshi Son, the portfolio companies of Vision Fund control 90 percent of the ride hailing market worldwide.

Also read: How SoftBank wants to replicate the success of Ping An in India with PolicyBazaar’s Docprime


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