Published: Tue, November 14, 2017
Finance | By Loren Pratt

SoftBank to invest $10 billion in Uber

SoftBank to invest $10 billion in Uber

Over the weekend, Uber had confirmed that it has closed an investment deal with Softbank Group and Dragoneer Investment group.

Uber has suffered a tumultuous few months which has seen former CEO and co-founder Travis Kalanick forced out after a series of boardroom controversies and other regulatory battles in multiple US states and around the world.

"We've entered into an agreement with the consortium led by SoftBank and Dragoneer [of San Francisco] on a potential investment, a statement from Uber said".

The agreement follows an October 3 Uber board meeting, in which directors voted to move forward with an investment from SoftBank.

Discussions between Softbank and Uber will now revolve around proposed price at which the former will buy stock and number of shares to be purchased. The Softbank deal will add six new directors to the board and eliminate the special voting powers of a certain type of company stock, which in turn will reduce Kalanick's authority over the board.

Currently Uber's largest shareholder is USA venture capital firm Benchmark with a 13 percent stake and founder Travis Kalanick who has a 10 percent stake. The SoftBank investment also sets up Uber to go public by 2019, another provision that was contingent on the deal.

Benchmark has agreed not to work with other investors to prop up the price during the tender offer.

SoftBank CEO Masayoshi Son said earlier this month that is was possible SoftBank could pull out of its deal with Uber and instead back its largest rival, Lyft.

However, Uber has already said and shown strong interest in driverless cars, prompting much anguish among the many human taxi drivers who either now use Uber to generate business or may lose out to driverless taxis of the future. But the SoftBank investment will let some of the company's investors sell their shares to lock in huge gains. It operates in about 30 Indian cities and competes with Ola, a ride hailing service backed by Japan's Softbank. As the two companies battle for market share, both have lost hundreds of millions of dollars a year.

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