Uber Technologies paved the way to receive a multi-billion-dollar investment led by SoftBank Group, after co-founder and ex-CEO Travis Kalanick reached a deal with Benchmark over board seats.
According to a news report in The Wall Street Journal, the deal, which was confirmed by Uber, puts on hold a lawsuit Benchmark had lodged against Kalanick. In exchange for putting the lawsuit on hold, Kalanick agreed to allow directors to vote on his appointees to the board for the three seats he controls.
Under the terms of the deal, six directors will be added to the board, and voting changes will be introduced that will limit Kalanick’s power over the board and give Uber much-needed stability.
“We believe this agreement is a strong vote of confidence in Uber’s long-term potential,” an Uber spokesman said in an emailed statement. “Upon closing, it will help fuel our investments in technology and our continued expansion at home and abroad, while strengthening our corporate governance.”
The investment by SoftBank was backed by new Uber CEO Dara Khosrowshahi, who has been tasked with overhauling the culture at the ride-hailing startup. “It’s a pretty great reset for the company,” said Bradley Tusk, a political strategist and Uber investor, said in the report. “Everyone staying in is focused on the possibilities of the future, and everyone mired in the past and present can move on.”
SoftBank is leading an investment that could be for as much as $10 billion, with SoftBank contributing $1 billion or more. SoftBank is expected to buy some shares that reflect Uber’s current $68 billion valuation and to acquire the remaining shares by investors for a lower price. If SoftBank doesn’t get at least a 14 percent stake, it could walk away from a deal, according to the report.