Ridesharing app Uber confirmed the company has reached a deal, paving the way for Japan’s SoftBank to invest in it, according to a Monday (Nov. 13) report in TechCrunch.
“We’ve entered into an agreement with a consortium led by SoftBank and Dragoneer on a potential investment,” Uber said in a statement. “We believe this agreement is a strong vote of confidence in Uber’s long-term potential. Upon closing, it will help fuel our investments in technology and our continued expansion at home and abroad, while strengthening our corporate governance.”
Uber did not disclose further details, but a source with knowledge of the deal said the documents were labeled an extension of its Series G round of fundraising. The investment group is also aiming to invest more by purchasing as much as $9 billion of Uber’s stock from employees and other shareholders.
According to the report, the aim is to get the ownership stake to 14 percent. The shares are expected to be acquired at a lower price than Uber’s current valuation. The tender offer is slated to kick off on Nov. 28 and could last 20 business days, and could be the largest secondary transition the markets have ever seen with investors unloading billions of dollars worth of Uber shares.
Over the weekend, the Wall Street Journal reported co-founder and ex-CEO Travis Kalanick reached a deal with venture capital firm Benchmark Capital over the board seats that paved the way for the Softbank-led investment. According to the WSJ news report, which was confirmed by Uber, the deal puts a hold on 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 and give Uber much-needed stability.
“We believe this agreement is a strong vote of confidence in Uber’s long-term potential,” a company 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.”