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Is Softbank just going to invest in every self-driving startup? That seems like a really weird investment strategy.

by Judgmentality 7y ago

Hydraulix989 7y ago
VCs invest in competitors all of the time in order to hedge risk. It only takes one to 10x and make it worthwhile.
- TeMPOraL 7y ago
  In unsaturated markets, the increased buzz of competition also helps with growth.
jhundal 7y ago
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-miss-the-forest-with-no-trees https://www.bloomberg.com/opinion/articles/2019-03-14/don-t-...
1123581321 7y ago
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.
- dalbasal 7y ago
  Sounds dangerously like a trust.
machinelearning 7y ago
Nah, its probably a consolidation strategy
anbop 7y ago
It's not any weirder than buying an index fund.
- bryanrasmussen 7y ago
  Don't index funds generally spread across more than one type of business? At least to a broader category.
westoque 7y ago
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.
- ulfw 7y ago
  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?
dalbasal 7y ago
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.

Is Softbank just going to invest in every self-driving startup? That seems like a really weird investment strategy.

Hydraulix989 7y ago

VCs invest in competitors all of the time in order to hedge risk. It only takes one to 10x and make it worthwhile.

TeMPOraL 7y ago
In unsaturated markets, the increased buzz of competition also helps with growth.

jhundal 7y ago

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-miss-the-forest-with-no-trees https://www.bloomberg.com/opinion/articles/2019-03-14/don-t-...

1123581321 7y ago

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.

dalbasal 7y ago
Sounds dangerously like a trust.

machinelearning 7y ago

Nah, its probably a consolidation strategy

anbop 7y ago

It's not any weirder than buying an index fund.

bryanrasmussen 7y ago
Don't index funds generally spread across more than one type of business? At least to a broader category.

westoque 7y ago

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.

ulfw 7y ago
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?

dalbasal 7y ago

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.