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SoftBank Acquires $10B Stake In Uber

November 14, 2017 by   | Category: Around The Net

Uber’s board of directors has agreed to a deal that will allow SoftBank to make a multibillion-dollar investment in the ride-hailing startup.

The agreement resolves a legal battle between Uber co-founder and former CEO Travis Kalanick and Benchmark Capital, one of the startup’s early investors, Reuters reported Sunday. Benchmark Capital, which owns about 13 percent of Uber, sued Kalanick in August, alleging that Kalanick misled Uber’s stockholders to gain control of three board seats.

“We’ve entered into an agreement with a consortium led by SoftBank and Dragoneer on a potential investment,” an Uber representative 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.”

The agreement comes a month after Uber’s board voted to eliminate its super-voting structure, in which early shareholders had 10 times the voting power, to a one vote per share model, according to a source familiar with the vote. The board also voted to expand the number of board members to 17, adding six seats to dilute additions made by Kalanick in September.

At the same time, Uber’s board approved the sale of $10 billion of stock to SoftBank, a Japanese internet giant. SoftBank plans to acquire a 14 percent to 20 percent stake in the world’s most valuable privately-held tech startup, board member Arianna Huffington said in October.

The vote came amid a tumultuous year for the ride-hailing startup, which has been rocked by a slew of scandals, including sexual harassment allegations that resulted in more than 20 Uber employees being fired. The company has been caught using a secretive tool called Greyball to avoid local authorities. The company is also defending itself against a trade-secret theft lawsuit from Waymo, a self-driving car business run by Alphabet, Google’s parent company.

 

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