Monday, 20 November, 2017

Uber seals multi-billion dollar SoftBank investment

The chief executive of Uber Technologies Inc Dara Khosrowshahi attends a meeting with Brazilian Finance Minister Henrique Meirelles in Brasilia Brazil Thomson Reuters
Theresa Hayes | 13 November, 2017, 19:37

A spokesperson gave a statement to TechCrunch, "We've entered into an agreement with a consortium led by SoftBank and Dragoneer on a potential investment".

Japanese technology conglomerate SoftBank has reached a deal with Uber to invest billions in the ride-hailing giant.

As part of the deal, venture capital firm Benchmark agreed to put its lawsuit against Uber co-founder Travis Kalanick on hold, and drop the complaint when SoftBank's investment and the governance reforms kick in, the people said. The deal is a vote of confidence in the company's potential and "will help fuel our investments in technology and our continued expansion at home and overseas, while strengthening our corporate governance", the statement said.

But over the weekend London Mayor Sadiq Khan recognised that Uber had apologised for mistakes and appeared ready to change after Transport for London refused to renew its licence in September, saying that it was not a fit and proper private auto hire operator.

Uber is valued at $68 billion, the most highly valued venture-backed company in the world. Now, the company has confirmed that Uber has sealed a multibillion dollar investment round from Japan. Both sides ended their feud on Sunday, clearing the way for the SoftBank investment. Benchmark had alleged that Kalanick duped investors into allowing him to create three disputed board seats that it later wanted to delete, which action would dump Kalanick out of Uber altogether.

This new funding deal will only be done once enough Uber shareholders opt to sell their shares. But there will likely be heavy arguments about the shares' worth in the coming weeks.

The Japanese group, founded by billionaire Masayoshi Son, expressed an interest several months ago in investing around $1 billion in Uber for a stake of at least 14 percent.

Crucially, Softbank expects to buy up others' Uber shares at a lower price than it will pay for its direct investment.

Although Kalanick quit as Uber chief exec, he remains on the board, having previously created the seat he now occupies.