A consortium headed by telecommunications group SoftBank has agreed to buy a stake in US-based ride hailing service Uber sized at roughly 18%, various outlets reported yesterday and today.
The consortium, which includes investment firm Dragoneer and private equity group TPG, is buying secondary shares equating a stake in the company sized at between 14% and 15% at a $48bn valuation, for up to $7.2bn.
The group will buy an additional $1.25bn in new shares at a $68bn valuation, similar to that at which Uber last raised funding, when Saudi Arabia’s Public Investment Fund provided $3.5bn of equity funding in June 2016.
SoftBank will come out of the transaction with a stake of about 15% in the company, while its co-investors will own approximately 3%.
Earlier reports that internet group Tencent and venture capital firm Sequoia Capital were also set to buy shares in the secondary deal have not been confirmed.
Uber is the US market leader in the on-demand ride sector and has a similar position in several other markets, boasting a presence in more than 80 countries across six continents. The primary share valuation means it retains its position as the world’s most valuable VC-backed private company.
The company has had its share of troubles in the past few months however, with co-founder Travis Kalanick forced to step down as CEO amid allegations of a toxic corporate culture, followed by a public dispute between Kalanick and early investor Benchmark over board seats.
Uber’s board of directors will be expanded from 11 to 17 members as part of the transaction, which is expected to close next month. Benchmark is also expected to drop its lawsuit against Kalanick as the issue will largely have been resolved through the deal.
Perhaps most importantly of all, SoftBank now has significant stakes in Uber as well as counterparts in China (Didi Chuxing), India (Ola) and Southeast Asia (Grab), giving it a big say in how the ride hailing sector develops globally.
Uber had previously raised $11.5bn in debt and equity financing. Its existing investors include Didi Chuxing, internet technology group Alphabet, software producer Microsoft and media companies Axel Springer and Bennett Coleman and Co, but it is unclear whether any of its backers will divest completely through the deal.
An Uber spokesperson told Recode: “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.”