Uber Accepts Colossal Investment from SoftBank, Announces IPO by 2019

Uber has announced that it will accept an investment from SoftBank, a Japanese tech investor, while it is expected to announce an initial public offering (IPO) in 2019, reports CNBC.

According to sources, the SoftBank investment is expected to amount to between $1 billion and $1.25 billion, and SoftBank hopes to purchase 14 to 17 percent of shares from existing shareholders at a discounted price.

One source also revealed that the new board members, Ursula Burns and John Thain, were instrumental in arranging the transaction.

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The board will expand from the current 11 members to 17, with two members coming from SoftBank, and four being independent, including an independent chairman. Burns and Thain were appointed to the board by the former CEO, and despite Benchmark, a Silicon Valley investment firm, filing a lawsuit against Kalanick to prevent their appointment, they will remain in their positions.

Additionally, the Dragoneer Investment Group will also participate in the investment deal between SoftBank and Uber.

Kalanick stated that the investment is a solid foundation for implementing future plans that include an initial public offering (IPO), and Uber’s president, Dara Khosrowshahi, mentioned that the IPO should take place between 2019 and 2021.

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However, this plan could diminish the powers of Kalanick and other early investors, as under the current state, Kalanick’s Class B shares give him voting rights of 10 votes per share, and after the IPO, the rights will transform so that each shareholder will have one vote per share.

Early investors Shervin Pishevar and Steve Russel announced that they plan to file a lawsuit against Uber and the Board due to the reduction of their voting power.

SoftBank could clash with Uber as the company is currently adjusting to a newly appointed CEO after a series of scandals, including a regulatory ban in London.

Certain shareholders, including Ron Burkle and Adam Leber, are calling for Benchmark to sell its shares and step down from the board.

>>>Khosrowshahi New CEO of Uber

Masayoshi Son, CEO of SoftBank, stated that he wants to invest either in Uber or Lyft. Son is an investor in Didi Chuxing, which is a co-owner of Uber’s Chinese subsidiary. In a recent interview, Son revealed that he survived the dot-com investment crash thanks to his fighting spirit, and that he invests in companies like Alibaba because of the charisma of their leaders.