Cab aggregator Uber Technologies Inc., has reportedly discussed selling a stake to SoftBank Group Corp and other potential investors. Media company Bloomberg reported Uber’s shareholders and board have discussed a potential sale to the Japan based Internet corporation, citing people familiar with the matter.
Early backer Benchmark led the talks for fresh capital infusion into the company, the report said. This year Uber faced multiple issues from all directions which led to the eviction of CEO Travis Kalanick and a complete leadership upheaval.
So far there are more than 500 investors who own stock in this highly valuable company. But, according to Bloomberg, early investors reducing their stake suggests the Uber scandals have affected the company negatively. The report further added the former CEO was not aware of the proposed sale until recently and generally opposes selling early shareholder stocks. But the Uber board has allowed occasional exceptions to this rule.
According to a person close to the Japanese company, which has already invested in Uber’s prime rivals in India, Southeast Asia and China, SoftBank has no interest in buying Uber stock. They currently back Didi Chuxing in China and are also planning to invest in the Southeast Asia startup Grab. SoftBank have also recently launched a $ 93 billion technology fund with the Public Investment Fund of Saudi Arabia along with Mubadala Investment Company of the United Arab Emirates, Apple Inc., Foxconn Technology Group, Qualcomm Incorporated and Sharp Corporation.
Uber has had to cut deals with overseas competitors in China and Russia, due to intense competition and financial issues. Indian taxi aggregator and chief competition for Uber, Ola secured Rs. 1,675 crores in fresh funding from SoftBank in April this year. Softbank would have to face anti competition concerns in India if they had decided to invest in Uber.
The Bloomberg report however, did not state how big the deal would be or what size stake would Uber shareholders sell and at what valuation.
