Uber CEO Dara Khosrowshahi said SoftBank‘s head “doesn’t throw good money after bad” and that the company and its financial backer’s interests are aligned as the Japanese conglomerate rolls out another megafund.
Khosrowshahi, appearing on CNBC’s “Squawk on the Street, ” said Uber and SoftBank CEO Masayoshi Son are on the same page as the SoftBank’s Vision Fund 2 prepares to invest in companies that could become competitors with the ride-hailing giant.
“I think that Masa is a businessman. He doesn’t throw good money after bad. When he puts in money into companies, it’s because he believes in them and he thinks they’re going to be category leaders. We are their single largest investment on a global basis, so I think our interests and Masa’s interests are very much aligned,” Khosrowshahi told CNBC’s David Faber and Jim Cramer.
SoftBank launched its second megafund last month, contributing $38 billion of its own money. The fund is expected to total $108 billion and will invest in technology companies working with artificial intelligence.
This new round of investments could increase competition for Uber, which is trying to expand offerings such as food delivery service UberEats as it works toward profitability.
“The eats market continues to be very competitive,” Khosrowshahi said. “There’s a lot of capital coming into the category, because it’s growing, and I think eats is going to be a battle this year and next year.”
A new round of investments in startups could expand the total market for Uber’s services and be beneficial for the company, even if it creates competition, Khosrowshahi said.
“They know everybody, they understand the markets, and I’m very, very happy to have them as an investor, and I consider Softbank a very good actor in this marketplace. They’re going to put money against the markets, but that’s going to expand the markets, and we have been one of the cheap beneficiaries of that,” Khosrowshahi said.
Uber missed analyst expectations on the top and bottom lines in its first quarterly report since its initial public offering, sending its shares tumbling. The transportation company lost $5.2 billion in the quarter, due in part to stock-based compensation.