Telecommunications and internet group SoftBank has closed its $1.25bn equity investment in US-based on-demand ride provider Uber, the company told TechCrunch yesterday.
The funding was provided at a $69bn valuation as part of a larger deal in which a consortium of SoftBank, investment firm Dragoneer, venture capital firm Sequoia Capital and private equity firm TPG bought secondary shares from early investors and employees at a $48bn valuation.
Bloomberg has reported the overall size of the deal as being $9bn, but did not state whether that includes the equity portion of the transaction.
Selling shareholders included co-founder and ex-chief executive Travis Kalanick, who sold 29% of his stake in the company for approximately $1.4bn, a source told CNBC. Venture capital firms Benchmark and Menlo Ventures were also expected to divest stock in the deal.
SoftBank led the investment and now holds a share of about 15% in Uber, making it the company’s largest shareholder. It has three seats on a board of directors that is now 17-strong.
Uber told TechCrunch in a statement: “We are proud to have SoftBank, Dragoneer and the entire consortium in the Uber family.
“This is a great outcome for our shareholders, employees and customers, strengthening Uber’s governance as we double down on our technology investments and continue to bring our services to more people in more places around the world.”
Uber’s app-based ride hailing now spans 80 countries and it is the market leader or a significant competitor in most of them.
However, Rajeev Misra, a director of SoftBank who will take one of the new board seats, told the Financial Times yesterday that Uber would be more likely to prosper if it concentrates on its core markets: the US, Europe, Latin America and Australia.
The statement would call into question how much influence SoftBank will look to exercise at the company, considering it also holds significant equity stakes in rivals in markets such as India and Southeast Asia.
The primary investment took Uber’s total equity and debt financing to approximately $12.8bn, and its past investors include China-based counterpart Didi Chuxing, internet technology firm Alphabet, software provider Microsoft and media groups Axel Springer and Bennett Coleman and Co.
Saudi Arabia’s Public Investment Fund, Citic Bank, Hillhouse Capital, Fidelity Investments, Benchmark Capital, Wellington Management, Kleiner Perkins Caufield & Byers, Data Collective, CrunchFund, Goldman Sachs, BlackRock, Lowercase Capital, First Round Capital, New Enterprise Associates and Innovation Endeavors are also past backers.