Japanese bank Softbank will purchase a stake in ride-hailing business, Uber Technologies. The Japanese giant is leading a consortium that will pay $8 billion for a 15% share in San Francisco based firm.
Uber Technologies is currently a privately-owned business, which is expected to become publicly listed some time during 2019. The Softbank purchase values Uber at $48 billion, which is below the previous valuation of $68 billion.
Its anticipated the deal will close in early 2018.
Success for both parties
The deal is reportedly considered a success for both firms and in Uber’s case, a particular win for relatively new CEO Dara Khosrowshahi.
“We look forward to working with the purchasers to close the overall transaction, which we expect to support our technology investments, fuel our growth, and strengthen our corporate governance,” an Uber spokesperson said.
Softbank was equally positive on the deal.
“We have tremendous confidence in Uber’s leadership and employees and are excited to support Uber as it continues to reinvent how people and goods are transported around the world,” said SoftBank’s Rajeev Misra, director of Softbank Group Corp.
The deal will also see the Uber Technologies Board of Directors expand to 17 from the current 11. Two seats will be taken by Softbank.
The investment from Softbank – which will reduce the holdings of some existing, early investors – comes at the end of a testing year for the tech-driven cab-style firm.
Uber has faced cases of sexual harassment, a lawsuit by Google Inc’s owner Alphabet and the withdrawal of its London license. Uber also admitted earlier in 2017 it paid off hackers in 2016 after they accessed some of Uber’s privately stored customer and driver information.
Uber CEO Khosrowshahi made the announcement to make it clear the business was acting as transparently as possible. “We are changing the way we do business, putting integrity at the core of every decision we make and working hard to earn the trust of our customers,” he said.