Telecommunications group SoftBank, ride hailing service Didi Chuxing and investment firm Dragoneer are preparing to combine for an $8bn to $10bn investment in US-based on-demand ride platform Uber, TechCrunch reported yesterday.
The deal, which will likely close by the end of this month, will comprise a direct investment in Uber and the purchase of shares from employees and early investors in what could well be the largest secondary transaction in history.
The companies will execute the deal through a special purpose vehicle that could also include growth equity firm General Atlantic. Uber will likely be valued at almost $70bn pre-money, similar to the valuation at which it last closed funding.
Uber runs an app-based ride hailing service that spans 82 countries, and which as of June this year had been responsible for more than 5 billion rides. It has raised more than $11.5bn in debt and equity since it was founded in 2009.
The company’s investors already include Didi Chuxing, internet and technology firm Alphabet, software producer Microsoft, media companies Axel Springer and Bennett Coleman and Co, and a host of hedge funds, venture capital and private equity firms.
The prospective deal will obviously help Uber compete with domestic rivals worldwide, but the secondary element will also ease shareholder pressure for an initial public offering, enabling investors to make some of their money back early.
A significant funding round could also serve to partially obscure some of the negative publicity Uber has attracted of late.
So far this week the company has heard it will have to go to court to defend itself from allegations it stole trade secrets from autonomous car developer Waymo, learned that its general counsel Salle Yoo plans to resign, and saw a group of MPs argue that it should lose its taxi licence in London.