Softbank’s $1bn deal with Uber
A MULTI-BILLION dollar investment in Uber by Japanese tech giant Softbank was set to be signed last night after former chief executive Travis Kalanick and a combatant shareholder made peace. Benchmark, the venture capital firm that invested early in Uber and has a board seat agreed to drop
its lawsuit against Mr Kalanick, which it launched in August, to try to reduce the controversial co-founder’s power at the company.
In return, Mr Kalanick, who refused to approve Softbank’s investment until Benchmark dropped their legal challenge against him, will grant Uber’s board majority approval should he want to replace the board seats he controls.
Softbank is expected to invest at least $1 billion (£0.76m) in Uber and buy $9 million worth of shares from existing stakeholders.
The deal could be the largest private stock sale ever. As part of the deal, Uber agreed to expand its board from 11 to 17 seats, reduce Mr Kalanick’s disproportionate voting power and float the company by the end of 2019.
The SoftBank investment will allow early backers and employees to sell their shares sooner.
SoftBank will buy new Uber shares at the company’s current valuation of $67.5 billion, but from existing shareholders at a lower price.