Uber sells 15% stake to SoftBank

29 December, 2017, 01:53 | Author: Barbara Daniel
  • Travis Kalanick whose departure from Uber showed the cost of a toxic company culture

As part of the deal, expected to close early next year, Uber will offer potential drivers in the United States access to Fair to lease a vehicle, the Journal reported. The Japanese conglomerate set a threshold for its bid at 14 percent and while it's now able to purchase almost 50 percent more than it originally planned, it's reportedly limiting its offer to a 15 percent stake. 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. Uber lost $1.46 billion in the third quarter this year, up from $1.06 billion in the previous quarter. That's a roughly 30 percent discount over Uber's most recent valuation of close to $70 billion. While we have yet to learn which investors have cashed out for the price of about $33 a share, Thursday's result is the reward for years of drama at a company that nevertheless saw astronomical growth since its founding in 2009.

Getting the company ready to go public will be Khosrowshahi's ultimate goal over the next year, though it won't be easy.

As part of the deal, Uber plans to add six directors, two of whom come from SoftBank, and expand voting rights for all investors.

"The stockholders did the smart thing". However, under the deal, Uber will take a stake in Fair and the startup will become an exclusive partner with Uber, offering drivers the ability to lease cars.

Some initial investors in the consortium, including General Atlantic, dropped out over disagreement about the price offered to shareholders, Reuters previously reported.

Softbank has made a series of high-profile tech investments and shown an appetite for investments in ride-sharing, backing China's Didi Chuxing and Southeast Asian taxi-hailing app Grab, among other companies.

The investment comes after a year of troubles for Uber, including a lawsuit by Alphabet Inc's self-driving auto unit Waymo, that alleges trade secrets theft, and federal investigations that include possible bribery of foreign officials in Asian countries and the use of software to evade regulators.



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