The world's most valued ride-hailing company just became a lot more richer as it finally closes a deal with Japanese multinational telecommunications corporation SoftBank.
Uber shareholders sold nearly $8 billion to investors led by SoftBank. In addition, the corporation has also completed an investment of $1.25 billion directly into the company, pushing it toward a $70 billion valuation.
SoftBank Completes Uber Investment
As it stands, SoftBank is now Uber's largest shareholder, and the completion of the deal triggers sweeping changes to the company's board and stock, which were part of the conditions that led to the deal going through in the first place. Those changes include the company allotting extra seats in its board, with the number now amounting to 17 — which is much, much larger than typical board rooms.
According to Bloomberg, SoftBank intends to place two executives on Uber's extra seats: Rajeev Misra and Sprint CEO Marcelo Claure. Four other seats would also need to be filled, including a board chair.
"Uber has a very bright future under its new leadership," said Misra, highlighting the "professionalism" of the company's management team and board members in helping the transition move forward.
The sale also erases super-voting stock rights some early employees, investors, and backers used to hold. Yes, that includes former CEO Travis Kalanick and capital firm Benchmark, which is halting a legal pursuit now that the deal has been completed.
Big Payout For Travis Kalanick
As a side note, the deal also means that Kalanick is now a billionaire — both on paper and in reality, thanks to his sale of around 30 percent of his total stake in Uber. He now has a net worth of about $4.8 billion, as estimated by Forbes. On the flip side, Kalanick's influence in the company will be reduced as part of changes to the governance brought about by the sale.
"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," an Uber spokesperson said.
The SoftBank deal was arranged near the end of 2017, when the group made a deal valuing Uber at around $48 billion, a significant discount to its previous $69 billion valuation from a past round. The deal is a victory for Dara Khosrowshahi, who took over from Kalanick's CEO gig in September 2017.