The Softbank Group said that it may withdraw from investing in Uber if conditions on share price and a minimum of shares are not satisfactory. Over the weekend, Uber had confirmed that it has closed an investment deal with Softbank Group and Dragoneer Investment group. Uber shared a statement with MediaNama, but it did not disclose any details. The statement added that it has entered into a potential investment deal and that it will use the funds to fuel its investments in technology, expansion in the US and abroad, and will allow Uber to strengthen its corporate governance.
According to the Associated Press report, Softbank is looking at 14% stake in Uber against investment worth around $1 billion.
According to media reports, Uber and SoftBank have been discussing this deal for a long time, but it did not translate owing to Uber’s ongoing difficulties, mostly related to its culture which led to former CEO Travis Kalanick to step down from his position.
Earlier this year, venture capital firm Benchmark Capital filed a lawsuit against Kalanick for breach of contract and fiduciary duty alleging him that he gained several board seats through “material misstatements and fraudulent concealment”. However, it seems that Kalanick and Benchmark Capital have reached a truce and the two agreed to drop the lawsuit the SoftBank-Uber deal happens successfully, according to a Techcrunch report.
Cab aggregation space India
Note that Uber competes with Ola in India, which has been on a funding spree and has SoftBank as a common investor. Last month, Ola raised $1.1 billion led by Tencent Holdings Limited in the latest round of funding. Ola’s existing investor SoftBank, in addition to other new US-based financial investors also participated in the round. Moreover, the cab aggregator has said in a statement at the time of funding that Ola is also in advanced talks with other investors to close an additional $1 billion as part of the current financing round, concluding a total raise of over $2 billion. In May this year, Uber infused Rs 51.64 crore into its India operations.