Expanding Business Investments Across Asia
SoftBank made the business investment in a bid to expand and facilitate ADA’s operations in Asia. At the moment, ADA has 1,300 customers in the region.
The move will provide SoftBank with a 23.07% stake in ADA, which is currently valued at RM1.07 billion ($260 million), while Axiata will remain the company’s major shareholder with a 63.47% stake. The business investment in ADA will allow SoftBank to start its “Beyond Japan” project, said the Representative Director and Chairman of the company, Ken Miyauchi.
"We will utilize ADA's know-how in data and AI, and its support structures. And by closely collaborating with ADA, I'm confident we can propose new digital marketing solutions to companies in Asia and help support their digital transformation,” Miyauchi said.
The business deal is also in accordance with the growth strategy presented by the company three years ago when it conducted an IPO.
"It's a strategy that builds on our core telecom business so we can expand into new business areas. Since then, I have expanded our portfolio of non-telecom businesses in Japan with mobile payments operator PayPay, internet advertising and e-commerce provider Yahoo Japan, and fashion e-commerce leader Zozo,” Miyauchi added.
Under the terms of this business deal, SoftBank’s vice president Daichi Nozaki is set to join the ADA board this month. Izzaddin Idris, Axiata’s president and chief executive, said both his company and SoftBank believe ADA is a good fit for a number of SoftBank’s existing businesses.
The AI startup expects to hit $2 billion in business valuation within the next five years. The company will use the fresh capital to create a big data platform and AI models focused on digital marketing and the automation of content creation.
Meanwhile, SoftBank also has IPO plans for its fintech startup PayPay. SB Payment Service could be another candidate for the IPO, according to Reuters. PayPay is a QR code payment app that launched in 2018 and has 40 million users today.
“We want PayPay to IPO in the future so they will become independent... I don’t think that would be too far out,” said Junichi Miyakawa, SoftBank’s recently-appointed CEO.
The fintech startup company hopes to attract new investors thanks to emerging business opportunities as the wireless market continues to grow. Moreover, SoftBank also plans to expand in Asia with its chat startup business Line, which merged with Z Holdings in March.
The Japanese company hopes to double its user base at PayPay within the following three to four years. In the long run, SoftBank wants to increase business investments in both the autonomous cars and AI industries, according to Miyakawa.
Back in 2018, SoftBank announced the development of an autonomous car platform with Toyota.
SoftBank is set to invest $60 million in the Malaysian startup company ADA. The investment would allow ADA to expand and speed up operations in Asia and will provide SoftBank with a 23% stake in the company. Moreover, the Japanese company is exploring IPO plans for numerous startups it owns.
About the Author
Luigi Wewege is the Senior Vice President, and Head of Private Banking at Caye International Bank. Outside of the bank, he serves as an Instructor at the FinTech School which provides online training courses on the latest technological and innovation developments within the financial services industry. Luigi is also the published author of: The Digital Banking Revolution.