Saturday, 21 July, 2018

Uber closes multi-billion dollar deal with SoftBank

As part of the deal Soft Bank intends to invest $1.25 billion in Uber at its higher valuation of $68 billion. File As part of the deal Soft Bank intends to invest $1.25 billion in Uber at its higher valuation of $68 billion. File
Cristina Norman | 29 December, 2017, 02:25

SoftBank and its co-investors are acquiring some of the company at a valuation of $48 billion.

SoftBank, the Japanese conglomerate, has reached a deal to invest more than $7 billion in Uber for a 15% stake in the ride-hailing startup, according to sources familiar with the deal.

The price offered for the shares valued the firm at $48bn and was a discount to Uber's most recent fundraising round, but for some of the firm's earliest investors could provide a big payoff. SoftBank and the rest of consortium, which includes Dragoneer Investment Group, will own about 17.5%, including a secondary share purchase from earlier investors and employees, as well as $1.25bn of fresh funding. Employees could choose not to sell before SoftBank's offer expires at noon Pacific Time on Thursday.

Uber said: "We look forward to working with the purchasers to close the overall transaction, which we expect to support our technology investments, fuel our growth and strengthen our corporate governance". If the deal is successful, SoftBank will buy another $1 billion worth of Uber shares at the company's prior $69 billion valuation, the spokesman said.

The blockbuster deal offers a cash infusion to Uber and its shareholders ahead of its actual public offering, which is planned for 2019.

The moves come as Uber concludes a hard year, in which it faced a sexual harassment scandal, investigations by regulators and a lawsuit over allegedly stolen technology, among other challenges. Benchmark, Uber's largest venture capital backer, will also drop a legal case it's pursuing in arbitration against cofounder Travis Kalanick.

As part of the deal, Kalanick agreed that he can not fill the three board seats he controls in the future without majority approval by the board. The deal will trigger a number of changes in the way the board oversees the company, which is facing with federal criminal investigations, a high-stakes lawsuit and complaints about its workplace culture.

To pave the way for the deal, Uber previously agreed to add six new seats to its board, two of which will go to SoftBank. The closing of the deal will also mark the end of the company's supervoting share structure, moving the company to a "one share, one vote" system that further weakens the influence of early executives and shareholders.

Kalanick resigned as Uber CEO in June after months of crisis.

SoftBank founder Masayoshi Son has taken a keen interest in ride-hailing companies around the world and already has sizeable stakes in China's Didi, Brazil-based 99, India's Ola and Singapore Grab, all of which have competed with Uber.

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