Uber and SoftBank’s moves to raise additional funding globally will help them ramp up investments in India.
While Uber has raised $3.5 billion from the Saudi Arabian Public Investment Fund, SoftBank has mopped up nearly $8 billion by divesting a part of its stake in Chinese e-commerce giant Alibaba.
A spokesperson for Uber India confirmed that some of the funds raised by the cab aggregator’s American parent firm will head to India.
“Having grown exponentially over the last two years, we are bullish on the Indian market and this investment will support the remarkable growth of Uber in India,” she said.
She added that the investment in India is likely to double, with a substantial amount going towards product development and expansion.
However, Uber’s arch-rival Ola need not worry because one of its key investors, SoftBank, is flush with funds too.
Funding crunch The possibility of fresh cash infusion comes at a time when most Indian unicorns are facing major funding crunch. SoftBank is heavily invested in Indian online companies such as Ola, Housing.com, Snapdeal, Oyo Rooms and InMobi.
While a SoftBank spokesperson declined to share any details on the company’s India investments, analysts say the fund raising augurs well for Ola, Oyo and others.
Ajeet Khurana, an angel investor and e-commerce expert, said: “The sale of shares will definitely strengthen the SoftBank balance sheet and they will start behaving more like asset managers. I think they will get overweight on their Indian investments.”
Will the money come? Harshad Lahoti, founder of ‘ah! Ventures’, however, felt that Indian ventures are unlikely to get any boost as the sale of shares in Alibaba seems essentially a move by SoftBank to cut its debt of over $100 billion. “If that’s true, then none of this money will make it to India,” he said.
SoftBank has so far invested close to $2 billion (₹13,000 crore approximately) in India. SoftBank CEO Masayoshi Son had earlier this year told Indian media that the company will invest $10 billion in the next 5-10 years. However, it has not infused any fresh funds in any of its portfolio companies over the last nine months, a time when they needed it most.