SoftBank agrees to invest in Uber at 30% less valuation

Softbank

SoftBank and Dragoneer Investment Group, which have been in talks with Uber to spend some multi-billion dollars in the company, are offering to invest $6 billion at the company’s valuation of $48 billion, according to the Bloomberg report.

The offered valuation is 30% lower than the valuation it fetched in its most recent round of fundraising when the company was valued around $70 billion.

During this month, the San Francisco-based company confirmed investment in a statement and said the company has entered into an agreement with a consortium led by SoftBank and Dragoneer on a potential investment.

It’s a package deal and the $1 billion investment at Uber’s last private valuation is contingent on the secondary happening. The tender would include nearly $9 billion of shares from existing shareholders, the amount needed to get the SoftBank-led group its desired 14% of the company, according to TechCrunch.

The current deal may include an investment of $1 billion in the company at Uber’s last private valuation is contingent on the secondary happening.

However, SoftBank and Dragoneer Investment Group is also planning to invest a much larger amount by buying up to $6 billion in Uber shares from employees and other shareholders.

The Japanese conglomerate will acquire between 14-20 percent in the ride-sharing company.

The investment deal includes both a direct investment in the company at the last private valuation and also a secondary transaction, buying out existing shareholders. These shares are expected to be purchased at a lower valuation.

Technically, the deal will only be done once enough Uber shareholders opt to sell shares.

The deal was announced a few weeks later when SoftBank CEO Masayoshi Son said he could still walk away, and perhaps even invest in Uber’s rival Lyft Inc.

“Depending on the price and conditions, it is wholly possible we could shift our investment to the other main company Lyft. It is wholly possible. We won’t know until the very end,” Son had earlier told at a press conference following SoftBank’s second-quarter earnings.

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