SoftBank looks to move on with Indian mobility sector

By Alnoor Peermohamed,Aug 07, 2019

BENGALURU: SoftBank is closely evaluating the mobility sector in India, including the two-wheeler mobility space, multiple people familiar with the matter told ET, as the Japanese investment powerhouse scouts for the next phase of innovation after ride hailing.

After dominating investments in the ride-hailing space globally with bets on market leaders Uber, Grab, Didi Chuxing and Ola, the firm has made inroads into upcoming segments like rentals, autonomous driving and even

management firms globally, a trend that could also play out in the India market.

In India, which is the largest two-wheeler market in the world, SoftBank’s move beyond ride-hailing could be a bet on the emerging two-wheeler rentals business. ET has learnt that the Japanese firm has had engagements with companies such as Bounce, Vogo and Drivezy, though no investment plans are in the pipeline yet.

SoftBank’s interest in the new mobility space can be gauged through its two investments in peer-to-peer car rental service Getaround and vehicle leasing platform Fair, both in the US. Soft-Bank invested $300 million in Getaround in August last year, followed by leading a $385 million investment in Fair in December.

A SoftBank spokesperson declined to comment, but said the company was focused on ride-hailing as a sector and was interested in future technologies in the area.

Still in its infancy, the scooter rentals businesses are looking to disrupt first- and last-mile connectivity and hold a lot of promise, but have yet to expand across India and

prove out unit economics of the business, a metric that investors said SoftBank and other large investors are closely tracking, which has played out in US and China.

“While the model works in Bengaluru, there are questions around how conducive the climate will be in other top cities in India to scale up,” said an investor in one of these scooter-rental companies. “Also, unit economics is yet to be proven. Even at the density these businesses have in Bengaluru, the losses are unsustainable,” he added. All three major players in the space are largely based in Bengaluru and a few surrounding cities, and plan to move into new markets only later this year.

Source: The Economic Time, Aug 11, 2019,
Link: https://economictimes.indiatimes.com/small-biz/startups/newsbuzz/softbank-looks-to-move-on-with-indian-mobility-sector/articleshow/70562757.cms