Uber set to sell $10bn stake to Softbank


Uber appImage copyright Getty Images

Uber has struck a deal that could lead to a huge investment by a consortium led by Japanese conglomerate Softbank and San Francisco group Dragoneer.

The size of the potential investment has not been disclosed, but reports say it could be up to $10bn (£7.6bn).

The ride-hailing company said the money would fuel Uber’s expansion and investments in technology.

But it could transform its corporate structure and see a share listing by 2019, if the deal goes ahead.

“We’ve entered into an agreement with a consortium led by SoftBank and Dragoneer on a potential investment,” Uber said.

“We believe this agreement is a strong vote of confidence in Uber’s long-term potential.”

If completed, the firm plans to use the funds to expand its business further as it faces increasing competition at home and abroad.

As well as boosting its investments in technology, Uber said it would strengthen its corporate governance.

That could help bring stability to the world’s most valuable start-up after a year of scandals, infighting and the ousting of former chief executive Travis Kalanick in June.

Early adopter

Softbank, the Japanese telecommunications and technology giant, declined to comment on the potential investment when contacted by the BBC.

However, Softbank chief executive Masayoshi Son said last week that “whether we make an investment in Uber, or not, is not decided yet”.


Analysis: Rory Cellan-Jones, BBC Technology Correspondent

It has been a dreadful year for Uber – with boardroom rows, allegations of a toxic culture within the company, and damaging clashes with regulators, notably in London. Why then does SoftBank still think a business making substantial losses is worth $68bn?

On one view, it is making a bold bet on a future where Uber’s rapid pace of growth continues in cities around the world, where rivals melt away, and where its huge investment in autonomous driving pays off, transforming the economics of transport.

On another, it is just a speculative punt from a firm that has got $100bn burning a hole in its pocket. That is how much sovereign wealth funds and tech giants like Apple have put into the SoftBank Vision fund and its founder Masayoshi Son seems in a hurry to spend it.

The mere existence of this huge fund is helping to fuel the tech valuation bubble – if it bursts, then splashing so much cash in Uber’s direction may look rash.


He said a deal would depend on “pricing and the terms and conditions” as most of Softbank’s investment would be used to buy out shares from current investors.

Buying the existing shares would reportedly allow Softbank to take a 14% stake in Uber, while $1bn is said to have been set aside to buy new shares.

Mr Son added that while Uber was struggling with “management issues”, he believed it was still a “good company”.

Sources told the BBC it could take up to a month for the investment deal to be wrapped up.

Once completed, it would mark the latest in a series of overseas investments by Softbank including:

SoftBank has not revealed how much of the money to be invested in Uber would come from its technology focused Vision Fund, which has more than $93bn at its disposal.

View the original article: http://www.bbc.co.uk/news/business-41965130

Mr Son is known to have an eye for potentially transformative industries and trends. He was an early investor in Alibaba and owns close to 30% of the Chinese e-commerce giant’s shares.

In the same category are

Exeter couple finally ditch 1950s appliances Image copyright David Hedges/SWNS Image caption They say they are "not interested" in money and are hoping a museum or collector will take the mach...
Anna Soubry blames threats on ‘Brexit mutineers’ headline Image copyright Getty Images Ex-Tory minister Anna Soubry says her office has received 13 death threats since a newspaper front page named her as on...
Morocco food stampede ‘kills 15 and wounds five’ At least 15 people have been killed in a stampede in Morocco while food aid was being handed out.The incident occurred in the town of Sidi Boulaalam...
Lena Dunham sorry for comment on writer accused of sexual assault Image copyright Getty Images Image caption Lena Dunham was the star of Girls on HBO The star of Girls, Lena Dunham, has apologised for supporting ...
Waddesdon air crash: Bodies recovered from crash site Image caption Both aircraft involved in the crash were from Wycombe Air Park The bodies of four men killed in a crash between a helicopter and pla...
Chancellor Philip Hammond’s ‘no unemployed’ remark attacked Media playback is unsupported on your device Media caption"There are no unemployed people. We've created 3.5 million new jobs since 2010."Opposition...

Dont forget to “Like” us on Facebook


Need something to share, visit our sister site for the

‘News in the last 30 days”

in a clear concise package ….

 

If you are an artist or interested in art, visit our art website and read about todays artscene and browse some of our artist profiles

 

Comment on this story