PYMNTS-MonitorEdge-May-2024

Uber Investors Looking To Sell Shares?

Uber Technologies’ venture capitalists and the company’s board may be gearing up for a share sale to SoftBank Group and others, at the urging of early investor Benchmark, Bloomberg reports.

The newswire quoted unnamed sources “familiar with the matter.”

The discussion of a share sale mean a “major turning point” has arrived for the company, according to Bloomberg. The implication is that some of the earliest investors want to reduce holdings, which in turn implies that scandals and negative headlines have been wearing down investor enthusiasm for the company.  The former CEO, Travis Kalanick, had not been aware of the Benchmark plan until recently, which comes after the investor had “led an investor revolt” against Kalanick, which in part led to his resignation from the CEO role.

In addition to Benchmark, Bloomberg said “two smaller, longtime Uber investors” are also exploring share sales, with an eye on valuation and competitive pressures from ride-hailing peer Lyft.

A share sale would also bring fresh VC funding to the company, according to those sources, with no real indication, as of yet, of valuation. Bloomberg noted that any share sale would require board approval. Uber’s latest valuation was at $69 billion, though it is unclear what the impact of Kalanick’s resignation, and the ousters of several department heads, might mean for that valuation. The company is looking to fill the CEO, CFO and several other roles.

Bloomberg reported that SoftBank has no plans in place to invest in Uber, while the company, which is bringing a $93 billion technology fund to market, has already backed Uber rivals in Asia.

There could be some complications in the works, noted the newswire, as another Uber venture capitalist, the Saudi Public Investment Fund, also will be backing the SoftBank tech fund.

PYMNTS-MonitorEdge-May-2024