Uber Technologies Inc. completed its deal with a group of investors led by Softbank Group Inc. on Thursday. The deal was valued at $9.3 billion in stock. With the completion of the agreement, SoftBank then now becomes the largest stakeholder in the ride-hailing firm.
“We’re proud to have SoftBank, Dragoneer and the entire consortium in the Uber family,” Uber said in a statement.
“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 added.
The deal included a large purchase of shares from existing Uber investors and employees. SoftBank was also able to acquire the shares at a discounted valuation for the company of $48 billion. This was a 30 percent drop from Uber’s most recent valuation of $68 billion.
According to an Uber spokesperson, the secondary stock sales will be completed by the end of the day on Thursday. But that it will be done on the Nasdaq Private Market.
The investor group is col-led by SoftBank and Dragoneer Investment Group, and includes Sequoia Capital. The spokesperson also said that they were able to complete a $1.25 billion investment of fresh cash at the other, higher valuation.
In total, the investors will take a stake of around 17.5 percent in Uber. SoftBank will then be keeping 15 percent, automatically becoming the company’s largest shareholder.
The investment triggers some governance changes at Uber which will take effect immediately. One of these said changes is the addition of new board members.
Uber Co-Founder Officially Becomes a Billionaire
With the deal being finalized, Uber Co-founder Travis Kalanick finds himself becoming an official billionaire. Despite him moving up in the rich list, his powers over the ride-hailing company will be reduced sharply.
He has presided over numerous issues over the years. Some of these are the rampant culture of sexism, the cover up of a major hacking incident, spying on journalists as well as an alleged theft of trade secrets from Google.
Kalanick sold 29 percent of his shares. Softbank then stands to gain two seats on Uber’s board as result.