Uber is accepting an investment from Japanese technology investor SoftBank, fusing a developing portfolio of U.S. technology investment made by valiant tycoon Masayoshi Son. The board on Tuesday additionally passed a decree to open up to the public by 2019. SoftBank’s investment would be $1 billion to $1.25 billion. Its last announced valuation was $69 billion, sources told CNBC. SoftBank likewise would purchase a 14-17 percent stake of shares from existing investors at a rebate, the sources said.
Uber believes that having new board individuals Ursula Burns and John Thain was a “defining moment” that completed the arrangement. The board will go from 11 seats to 17 seats. Softbank will get two, and four will be autonomous, including an autonomous chairperson. Burns and Thain, who were named to the board by previous CEO Travis Kalanick, will be permitted to hold their seats.
“Today, after welcoming its new directors Ursula Burns and John Thain, the board voted unanimously to move forward with the proposed investment by SoftBank and with governance changes that would strengthen its independence and ensure equality among all shareholders,” Uber said in a statement to CNBC. “SoftBank’s interest is an incredible vote of confidence in Uber’s business and long-term potential, and we look forward to finalizing the investment in the coming weeks.”
“Today the board came together collaboratively and took a major step forward in Uber’s journey to becoming a world-class public company,” Kalanick said. “We approved moving forward with the Softbank transaction and reached unanimous agreement on a new governance framework that will serve Uber well.”
Yet, the arrangement likewise strips Kalanick and other early financial specialists of a lot of their decision-making power. Kalanick’s vast property of Class B shares, which granted him 10-to-1 voting power, will change so that every investor has one vote for every offer, The New York Times said.
Early financial specialists Shervin Pishevar and Steve Russell, who had super-voting shares, said they intended to record a legal claim against Uber and the board for stripping them of their voting power. “Today’s action by the board was the culmination of a blatant bait-and-switch, essentially robbing loyal employees, including the more than 200 early founding Uber employees and advisors, of their hard-earned shareholder rights worth billions in value.”
Uber investor Venky Ganesan, managing director of Menlo Ventures, told CNBC in September: “SoftBank is like the Iron Bank in ‘Game of Thrones.’ You want them backing you because it changes your odds of success.”