Uber in talks with SoftBank, Didi Chuxing and others for investment
Advertisement

Uber in talks with SoftBank, Didi Chuxing and others for investment

By Binu Paul

  • 16 Aug 2017
Uber in talks with SoftBank, Didi Chuxing and others for investment
Credit: Reuters

Global taxi aggregator Uber Technologies Inc is in discussions with a group of investors, including Japan's SoftBank Group and Chinese ride-hailing company Didi Chuxing, to raise a fresh round of investment, according to a media report.

The consortium of potential investors includes US equity firms Dragoneer Investment Group and General Atlantic besides SoftBank and Didi Chuxing. Chinese Internet conglomerate Tencent Holdings has also shown interest in the deal, Bloomberg reported citing persons familiar with the development.

The deal, which is worth as much as $12 billion, consists of two components, the report said. One, a fresh investment of $1 billion to $1.5 billion at the same valuation from last year and the other, a share buyback plan that will allow a set of its current shareholders to exit at a lower price than the current valuation.

Advertisement

Earlier this month, SoftBank Group CEO Masayoshi Son had said he was interested in investing in ride-hailing firms Uber and Lyft. “We are interested in discussing with Uber and Lyft. We have not decided which way,” Son told reporters after the company announced its quarterly results.

Uber has been engaged in a fierce battle for market share with India’s Ola and Southeast Asia’s Grab. While SoftBank is the largest shareholder in Ola, it was recently reported that Grab is raising $2.5 billion from SoftBank and Didi Chuxing, both of which are existing investors in the company.

The Bloomberg report said the proposed investment doesn’t warrant an immediate merger with any of these companies.

Advertisement

Last month, the company had agreed to merge its operations in Russia and five neighbouring countries with local market leader Yandex. A year earlier, Uber had sold its China business to local rival Didi Chuxing.

However, the proposed deal can materialise only if Uber can resolve the ongoing court battle between venture capital firm Benchmark Capital and Uber’s former chief executive officer Travis Kalanick, the report said.

As per the lawsuit, the venture capital group wants to force Kalanick off the board of the company and quash his rights to fill three board seats. It accuses Kalanick of hiding a number of misdeeds from the board and plotting to retain his authority at the firm even after he was forced to step down as CEO in June following a series of scandals.

Advertisement

Refuting the allegations, Kalanick issued a statement calling the lawsuit “completely without merit and riddled with lies and false allegations.”

Kalanick had stepped down from the company in June this year in the face of mounting pressure from investors.

The company is looking for a new CEO.

Advertisement

Kalanick’s move followed an investigation into the company’s culture and practices by US Attorney General Eric Holder, after a former female employee publicly accused it of promoting sexual harassment.

Since February, Uber has lost or sacked over a dozen senior executives after a law firm investigated 215 cases of sexual harassment, discrimination and bullying at the company. Around the same time, Emil Michael and Eric Alexander, two of Uber’s top employees reportedly close to Kalanick, also resigned. While Michael courted controversy in 2014 over remarks about prying into the private lives of journalists, Alexander was sacked after a media report said he had mishandled the rape case of an Uber passenger in Delhi.

Uber has also been in a legal tangle with Waymo, Google’s self-driving car unit, over intellectual property theft.

Advertisement

Waymo has accused Uber of stealing trade secrets and infringing on patents of its self-driving programme.

Share article on

Advertisement
Advertisement
Google News Icon

Google News

Follow VCCircle on Google News for the latest updates on Business and Startup News