Uber approves Softbank's multi-billion dollar investment

Uber is close to finalizing a multibillion-dollar investment by Japan's Softbank. | AP file

Uber is close to finalizing a multibillion-dollar investment by Japan's Softbank. | AP file

Uber has entered an agreement with a consortium led by SoftBank and Dragoneer for a potential investment.

The same consortium also plans to purchase $9 billion in Uber shares from employees and shareholders.

Disagreements in the tech firm's board appear to have been resolved, as early investor Benchmark Capital had been adamant that former CEO Travis Kalanick step down and withdraw his influence from the company.

Uber confirmed the deal was moving forward. Part of the new deal includes the fact that the company's founder must get a majority of the now-17 member board to approve any future changes to who holds those seats. "We believe this agreement is a strong vote of confidence in Uber's long-term potential".

This can bring stability to the world's most valuable startup (valued at almost $70 billion) after the downfall of its founder Travis Kalanick who resigned as CEO in June after allegations of sexual harassment, gender discrimination, and a toxic work environment. Benchmark has also agreed to immediately suspend its lawsuit against Kalanick, which it filed in August. Should current Uber investors decide that Softbank's buyout offer isn't tempting enough for them to sell up, it would seem that Kalanick will be back on the hook. But there will likely be some wrangling over how much shares are worth in the coming weeks.

It is sending tremors through the tech world with a its massive new Vision Fund - a venture capital fund with $100 billion coffers intended for start-ups and expected to dominate the industry so thoroughly it's playfully referred to as a "gorilla".

Benchmark agreed to drop the lawsuit in return for Kalanick's board power being diluted but its co-operation depends on the Softbank investment going through.

The Japanese group, founded by billionaire Masayoshi Son, expressed an interest several months ago in investing around $1 billion in Uber for a stake of at least 14 percent.

According to Fortune, Kalanick, who still controls three board seats, including his own.

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