Uber Gets Huge Chunk Of Change With Softbank Investment
Cash infusion brings with it major management shakeupby Jonathan Lopez, on
With New Years right around the corner, ride-hailing services like Uber are likely getting a major bump in use. Now, Uber has something else to get excited about, as Softbank just announced it was plunking down nearly $8 billion for a considerable stake in the company, a move that will also have far-reaching effects on how the company is run.
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Softbank announced it would fork over $7.7 billion for a 15 percent stake in the company
Uber has been under considerable scrutiny lately, with heavy criticism leveled at the company’s internal culture, all while it endures federal criminal probes, a high-profile lawsuit, and the departure of former CEO Travis Kalanick this past June. This latest news is hailed as a win for Uber’s new CEO Dara Khosrowshahi, and comes at a critical time for the company as it looks to expand while simultaneously hemorrhaging money and gearing up for an IPO sometime in 2019.
Making the buy is Softbank, a major Japanese telecomms player, which announced it would fork over $7.7 billion for a 15 percent stake in the company. Uber was originally valued at a $68 billion, which is pretty impressive for an app-based ride-hailing service, with this buy bringing that value down to $48 billion.
According to The New York Times, Uber’s early shareholders will be able to cash out for a substantial amount of money when the deal is complete. The New York Times also points out that the buy will include new rules and board members that will help to curb Uber’s old management from having too much sway in the company’s direction going forward. It’s expected this will result in improvements for both those working for Uber and those using the service.
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Source: The Wall Street Journal