Uber co-founder officially a billionaire

Uber co-founder Travis Kalanick will become a billionaire, after investors agreed to take a large stake in the ride-hailing firm.

A consortium led by Japan’s Softbank is buying a chunk of the company from existing shareholders as well as new Uber shares in a $9.3bn (£6.7bn) deal.

Mr Kalanick, who stepped down as chief executive in June, is selling $1.4bn worth of stocks, it is widely reported.

While he had long been worth billions on paper, this deal cements his wealth.

Mr Kalanick was driven out of the top job by a series of scandals, but his ties with Uber remain strong.

He remains a director at the company and is offloading less than a third of his holding – meaning he still has a stake that’s currently worth about another $3bn.

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A billionaire, but with reduced powers

Dave Lee, BBC North America technology reporter

If you believe in karma, look away now.

Travis Kalanick is a man who presided over a rampant culture of sexism, the covering up of a major hack, spying on journalists and, allegedly, the theft of trade secrets from Google. To name but a few issues.

And now he’ll officially be a billionaire.

On the other hand, the finalising of this massive deal will see Mr Kalanick’s powers reduced. He’s selling 29% of his shares, and Softbank, the Tokyo-based group which seems to be taking a stake in every bright idea in Silicon Valley, will gain two seats on Uber’s board.

The cash injection will offer both a boost and a cushion as Uber looks to continue its loss-heavy strategy to grow in just about every city and major town in the world.

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The consortium’s $9.3bn will buy it a new 17.5% stake in Uber.

Of that $9.3bn, about $1.3bn is a cash investment in new shares, with the rest going to existing Uber investors.

Uber called the deal a “great outcome for our shareholders, employees and customers, strengthening Uber’s governance as we double down on our technology investments and continue to bring our services to more people in more places around the world”.

Softbank, which was already an Uber investor, said it was “very pleased” with the deal and looked forward to “helping Uber become an even bigger global success”.

“Uber has a very bright future under its new leadership,” said Softbank director Rajeev Misra.

As part of the deal, Uber’s board has expanded from 11 to 17 directors, with Softbank’s investor group taking two of the new seats.

San Francisco group Dragoneer is another key investor.

The shake-up comes as Uber concludes a difficult year, in which it faced a sexual harassment scandal, investigations by regulators and a lawsuit over allegedly stolen technology.

It also continues to experience steep losses.

SoftBank has been making a series of increasingly high-profile technology investments, backing China’s Didi Chuxing and Southeast Asian taxi-hailing app Grab, among other companies.

 

 

Source:BBC