Friday, 16 November, 2018

Uber founder becomes billionaire as Softbank completes US$9.3bn investment

Uber On Uber founder becomes billionaire as Softbank completes US$9.3bn investment
Nellie Chapman | 20 January, 2018, 04:46

Uber has said the deal with Softbank is a "great outcome for our shareholders, employees and customers, strengthening Uber's governance as we double down on our technology investments and continue to bring our services to more people in more places around the world".

But he sold about one-third of his stake to Softbank for this deal and has now received a $1.4 billion payout.

In November, Uber confirmed the deal led by Softbank agreeing to sell $10 billion of its stock to the Japanese company. Uber's largest venture investor, Benchmark, led an investor revolt demanding his resignation.

Softbank has become the largest stakeholder in Uber after cutting a deal that includes buying shares from existing Uber investors and employees, Reuters reported. The BBC reported that the deal was worth United States dollars 9.3 billion, with Kalanick selling USD 1.4 billion worth of shares.

He's selling 29% of his shares, and Softbank, the Tokyo-based group which seems to be taking a stake in every bright idea in Silicon Valley, will gain two seats on Uber's board. This deal was important particularly to him because Softbank had threatened to invest in Uber's top competitor, Lyft, instead. As for executives, Softbank intents to name one of its executives, Rajeev Misra, and Sprint CEO Marcelo Claure to the board, said a source familiar with the matter. Four other seats, including a board chair, also will need to be filled.

In a candid interview with the Financial Times, Misra suggested that the company should refocus on its core markets to cut losses.

The agreement comes at a time when Uber is working to clean up after a year of scandals, which involved everything from sexual harassment allegations to five federal investigations to a trade-secret theft lawsuit from Waymo, the self-driving auto unit owned by Google's parent company Alphabet.

That deal dropped a cool $1.4 billion in cash into Kalanick's pocket and will soon end a contentious lawsuit with his biggest investor Benchmark.

Uber is hoping the deal helps it move past recent internal strife and strengthens the position of CEO Dara Khosrowshahi. There's no change to Khosrowshahi's target of 2019 for an initial public offering.