Uber’s valuation may be looking at a haircut — Japan’s SoftBank is officially offering to purchase shares of the firm at a $48 billion valuation. That is a 30 percent discount off of Uber’s most recent valuation of $68.5 billion, a person familiar with the matter said on Monday.
That discount investment won’t just signal a value drop for Silicon Valley’s most famous startup, according to reports in Reuters — the funds will also set off a series of governance changes at Uber that would limit some early shareholders’ voting power and expand the board from 11 to 17 directors.
Both moves would greatly curtail the power and influence of former Chief Executive Travis Kalanick.
Uber’s new CEO, Dara Khosrowshahi, is reportedly supportive of both the investment and the changes it will tip off — though it does come as a somewhat bitter coda on a year of scandals and change for Uber. Some of those scandals involved the treatment of female engineers within the firm, the complex and dramatic exit of Mr. Kalanik and the reveal last week that Uber went out of its way to cover over a hack.
The SoftBank block of investors will take a stake of at least 14 percent in the ride-services company, if the deal goes through. The SoftBank-led investor group will also acquire two of the new board seats, with the remaining four going to independent directors. If SoftBank cannot find enough interested buyers, they can walk on the deal. The Japanese firm is also expected to make a separate $1 billion investment in the company at the $68.5 billion valuation.
Even at the discounted price, Uber is the world’s second-highest valued private venture-backed company, after China’s ride-service company Didi Chuxing. But the haircut is — well, short — and will doubtlessly have a bit of an effect on Uber’s planned 2019 IPO, according to Phil Haslett, co-founder and head of investments at secondary marketplace EquityZen.
“It really comes down to a re-pricing of Uber’s value,” Haslett said.