SoftBank (SFTB.Y 1.24%) led a more than $500 million investment in China’s Didi Chuxing despite losing billions of dollars in its Vision Technology Fund.
Earlier Friday Didi Chuxing announced the fundraising round for its autonomous driving subsidiary was led by SoftBank’s Vision Fund 2. It marks the first time Didi Chuxing’s autonomous driving unit raised money from outside sources and is the biggest fundraising round for the self-driving sector in China. The company didn't say what its valuation is following the investment round.
IMAGE SOURCE: GETTY IMAGES.
Proceeds will be used to enhance safety and efficiency with autonomous vehicles and for research and development of self-driving technology. Didi Chuxing also plans to use some of the funding to accelerate self-driving services in specific areas in China and internationally and for further tests of its technology. The company said it has open-road testing licenses in Beijing, Shanghai, and Suzhou in China and in California.
SoftBank’s investment in Didi Chuxing comes at a time when the Japanese technology giant is struggling with massive losses on investments gone bad. In March, the tech stock announced plans to sell $41 billion in assets to buy back shares and shore up cash to silence its critics. Among the assets its mulling selling stakes in include T-Mobile US.
For the fiscal year ended March 31, the Vision Fund reported a loss of 1.9 trillion yen or close to $18 billion in large part because of writedowns in its investments of WeWork and Uber Technologies. Despite the losses SoftBank CEO Masayoshi Son has vowed to continue to invest in the technology leaders of tomorrow. Didi Chuxing is apparently on that list.
