A consortium led by Softbank closed its deal with Uber on Thursday, making Softbank the largest shareholder in the ride-hailing giant.
The deal involves the purchase of shares from existing investors and employees at a 30 percent discount valuation. Payments for secondary sales were completed by the end of Thursday.
The consortium including the Sequoia Capital is co-led by SoftBank Group Corp and Dragoneer Investment Group. The Japanese tech giant also completed a separate $1.2 billion primary investment at the current valuation, according to Uber itself. The group will overall take 17.5 percent stake in Uber, while Softbank will become the largest shareholder, keeping a 15 percent stake to itself.
“We’re 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 on our technology investment and continue to bring our services to more people in more places around the world,” said an Uber spokesperson in a statement to TechCrunch.
The investment deal activated major governance changes in Uber including the expansion of board members from 11 to 17 and cutting down the influence of former CEO Travis Kalanick. The governance changes will come into effect today.
Travis Kalanick, who had long been a billionaire on paper, has become one in reality after selling 30 percent of his stake (worth $1.4bn) in the ride-sharing company.
SoftBank members will be added to the Uber board and will help Uber prepare for its planned IPO in 2019.
“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,” said Uber spokesman.
CEO of Softbank’s Vision Fund, Rajeev Misra, who will be joining the Uber board, said that Uber has a very bright future under SoftBank’s leadership.
“Uber has a very bright future under its new leadership. It is now part of a wider SoftBank network ranging from Sprint to WeWork. I look forward to SoftBank helping Uber become an even bigger global success,” he said in a written statement.
Misra wants Uber to focus on building market shares in the US, Europe, Latin America and Australia rather than Asia – which has been the most competitive and costly region for Uber. Softbank believes that Uber would have a higher profitability rate in its core markets.
The ride-services firm has already left some of its major emerging markets such as China and Russia.
Softbank holds shares in most of Uber’s Asian rivals, including Didi Chuxing in China, Ola in India and Grab in Southeast Asia.