The Japanese tech giant and investor SoftBank has finally completed the process of purchasing a 20% stake in Uber. The sale will prove to be a big step for the company, as it tries to pacify its investors and make way for an initial public offering which is planned in 2019. Additionally, this move could also impact the influence of Travis Kalanick – former CEO of Uber who resigned from his post earlier this year in midst of several scandals. Kalanick still has a seat on the company’s board of directors and has 16 percent control over the voting power.
“We look forward to working with the purchasers to close the overall transaction, which we expect to support our technology investments, fuel our growth, and strengthen our corporate governance,” Matt Kallman, an Uber spokesman, said in a statement.
With this deal in effect, some new governance terms at Uber will also come into effect, which were approved by the Company’s board in October. Under this deal, the board will expand from 11 to 17, and two of the new seats will go to SoftBank, automatically diluting the power that Kalanick holds over the Board.
SoftBank is buying shares from early investors at a price that is taken from the lower valuation of $48 billion. This deal will not just allow the early investors but employees and venture capital firms like Benchmark and First Round to cash out, though this would still let the investors make a wealthy exit from Uber. Softbank will buy $1 billion shares directly from Uber for $70 billion valuation.
Uber is yet another addition to the Japanese Investors’ large portfolio of technology companies. SoftBank bought Sprint in 2012, British chipmaker ARM in 2016, and robotics company Boston Dynamics in 2017. The company has large stakes in other ride hailing services like China’s Didi Chuxing, Grab in Southeast Asia, and Ola in India.