Project Stories Creating joint ventures
Establishment of DiDi Mobility Japan Corp.

DiDi is a global company headquartered in Beijing, China, that operates the world’s leading online transportation platform including for taxi-hailing, rideshare, bikeshare, and food delivery. With more than 550 million users registered to its application and its daily rides reaching 30 million, DiDi is a world-famous unicorn company. SoftBank announced the establishment of a partnership with DiDi in February 2018 and set up DiDi Mobility Japan, a joint venture of the two companies, in June of the same year. And then in autumn 2018, DiDi Mobility Japan began pilot operations of taxi-hailing platform services that utilize DiDi’s innovative artificial intelligence and data analysis technologies. How did SoftBank put the partnership with DiDi on the right track?

Back in autumn 2017, a project to study a partnership with DiDi was set up with three initial members.
Maiko Takano, who had already managed the launch of many new businesses, served as the project leader, and Hiroki Ando with extensive experience in investment contracts joined the team. In December 2017, the project members visited Beijing, home of DiDi. The project started there with having test rides with DiDi’s taxi-hailing application to figure out the needs and satisfaction level of DiDi users in China. The objectives of the visit were to identify barriers to starting taxi-hailing services in Japan and to study how to build products and business schemes tailored to the Japanese market. Takano with experience in establishing Cybereason Japan in only three months and successfully launching its services, at that point, did not expect this DiDi project to become highly challenging.

Takano recalls that the first challenge she faced after the start of negotiations with DiDi was that she could not find the person in charge on the DiDi side. “A start-up is often a small organization with less than 100 employees. Meanwhile, DiDi is a large company with more than 8,000 employees despite of being a startup. In the rapidly growing organization, the person in charge changes frequently. Because using chat services is a common practice in DiDi, I received no reply to my emails. Accordingly, it took a long time for me to figure out to whom I should talk to ensure that things run smoothly.”

After the announcement of the partnership in February 2018, the project went into full-scale operation. Its code name is “Project PANDA.” One day the members on the DiDi side said, “We are JAPAN DREAM TEAM.” Using several letters extracted from the spelling, the project was named PANDA. As the number of members gradually increased, Project Panda has become a big project with more than 100 members.

Soshi Tsuchiya, who participated in Project PANDA as soon as he joined SoftBank as a mid-career hire, flew to China with Takano and other members just a little over a week after his joining the company. Their mission was to have negotiations for the localization of applications and other DiDi products. There are large differences between Japan and China in laws and regulations governing the taxi business, taxi hailing systems, and so on. DiDi products would not be accepted in the Japanese market without tailoring them to the needs of consumers in Japan. However, negotiations to decide the specifications of these products were never easy. Takano says that this is an issue specific to a joint venture with a global company. “DiDi wanted to align their products with global standards, while SoftBank’s first priority was to ensure user-friendliness for consumers in Japan. I carefully communicated with DiDi to coordinate such differences.”

Tsuchiya, who participated in Project PANDA after joining Softbank as a mid-career hire, has experience in launching new businesses in the technology field in his previous job. However, a new business fully funded by a single company and a joint venture funded by two companies are much different even though both are new businesses. He recalls that this project made him aware of many things. “In the case of a joint venture, services of the investors need to be defined. SoftBank is responsible for sales and marketing in the Japanese market, while DiDi is responsible mainly for technologies and products. They are the parties that should promote the same business, but also counterparts in negotiations to get more favorable terms and conditions. At first, I could not understand this point and failed to negotiate a contract. With the help of Takano-san with vast experience in contract talks, I became able to negotiate with an understanding of the situation. In last-minute negotiations, our contract talks continued deep into the night. That was a great learning experience for me.”

The members of Project PANDA included another new employee besides Tsuchiya. Nao Funada, who joined SoftBank in 2017 as a new graduate, looked back on those days. “I was assigned to the project to take charge of corporate registration and contracts when I was just getting used to working at the company as a newcomer. One of my senior colleagues told me, ‘Let’s work together to establish a company.’ At first I was led by the senior colleague, but gradually tasks began to come to me directly. And eventually I had conversations with DiDi members more frequently than anyone else and came to understand the content of the investment contract. Because my academic background is in technology, I did not know contract procedures at first. By the time of the conclusion of the contract, however, I was able to do everything by myself. I gained confidence through this experience.”

Ando has experience in establishing joint ventures and arranging investment contracts with startups. At the early stage of this project he formulated business plans for the joint venture and at the latter stage was responsible for figuring out in which areas in Japan the joint venture should roll out its business, localizing products, setting up a call center, and so on. He says that voluntarily participating in this joint venture establishment project has broadened his outlook. “Previously I had been engaged mainly in paperwork such as investment contracts and corporate valuation, where I had usually seen things from the perspective of shareholders and tended to make decisions based on nominal figures. But I came to realize that this approach was impractical. In this project, I had many valuable experiences by being directly involved in launching products. For example, partly because of having various stakeholders, some functions that were actually supposed to be implemented could not be added. In addition, we faced restrictions on what can be done within a limited time frame. Employees in field operations always make efforts to find solutions to overcome such issues. The most significant benefit from this project was that I became aware of the fact.”

“There are many enterprises that create ‘businesses,’ but few that create ‘companies’,” says Tatsuya Okazaki, who took over responsibility for formulating business plans from Ando and has been on loan to DiDi Mobility Japan from SoftBank since the establishment of the joint venture to manage accounting, finance, and other administrative work. “Through the launch of this business, the scope of what I can and must decide on my own has expanded considerably. Many decision-making opportunities lead to self-growth.” When establishing the joint venture, beyond the original scope of his duties, he needed to make decisions by himself on all matters necessary for corporate management, ranging from budget to office locations, human resources and recruitment policy, and name card design. Immediately before the start of services, all DiDi Mobility Japan employees visited taxi companies to conduct training for their sales representatives and drivers. The best part of being involved in launching a joint venture is that in one project employees can experience wide-ranging work that they normally cannot do unless they move to different departments.

I was able to create a new company including corporate culture from scratch. DiDi Mobility Japan is building a challenging culture different from that of SoftBank. It is an agile and energetic company that repeats a trial-and-error process.” Okazaki describes the company he created in this way.

“Honestly speaking, I felt relieved more than rewarded,” Tsuchiya says. In his previous job, Tsuchiya worked on planning a new sharing economy business. As the product, marketing strategy, and a customer support structure were in place, all that was left was to release it. At that timing, the project was closed. He experienced a bitter feeling when coming close to the release. “Chairman Son and President Miyauchi declared in their public speeches that SoftBank would roll out DiDi services in Japan. That made me feel assured that this project would definitely go live. I was glad to see the new business I was involved in finally come to life.”

Takano recalls that she has developed a friendship between working women with DiDi’s legal manager. “I think it was an issue specific to the DiDi project that, even though I found the person in charge at DiDi, negotiations often did not go smoothly.”

Takano continues saying, “Bringing its services from the large Chinese market to the global Japanese market may have been a big challenge for DiDi, too. The legal manager is one of the members who had promoted DiDi business in Brazil and Mexico and has a deep understanding of global roll-out of business. She and I as fellow women got along well with each other. She worked together with project members on the DiDi side to sort out various issues behind the scene. Despite her position as legal manager, she proactively proposed to make necessary agreements on matters ranging from application upgrade to contract terms to keep the project on schedule. Without her cooperation, SoftBank could not have successfully established the joint venture and announced it at its annual conference, SoftBank World, in July 2018,” Takano recalls. When the DiDi legal manager visited Japan after the completion of the joint venture establishment project, she handed her comrades Takano and Funada letters in her own hand.

SoftBank has been creating joint ventures one after another. Takano says that there are two meanings in the establishment of a joint venture from the perspective of an individual engaged in the task. The first meaning is to maximize the growth of the relevant business. There are many cases where, even though new technologies and services entered the Japanese market from overseas, the foreign company, for its own reason, ultimately decides to scale down the business or withdraw entirely from Japan. Meanwhile, a joint venture is supported by the commitment of two companies in the form of investment. “To maximize the performance of a business with future growth potential, establishing a joint venture is meaningful. What we are doing is not merely bringing products of foreign startups to Japan, but also refining them to meet the needs of customers in Japan and offering support. To this end, it is essential to invest sufficient human and financial resources and establish an operational organization that grows independently.”

Another meaning is to make contributions to the future of Japan through the creation of new jobs. Building a new company as a joint venture means creating workplaces there. By establishing joint ventures, SoftBank has been creating new jobs in Japan. Creating places to work with excellent foreign technologies and human resources must open up new horizons for Japan’s employment situation and future. SoftBank’s challenge for information revolution through the establishment of joint ventures will continue going forward.