The news (extracted from The New York Times):
- Uber’s board of directors has voted for a change in governance structure that will pave the way for an investment by SoftBank. The Japanese giant, which is considering an investment of over US$1 billion, is also an investor in Asian ride-hailing companies Didi Chuxing, Grab, and Ola.
- The approved measures will reduce the clout of co-founder and ousted CEO Travis Kalanick, according to NYT sources. But some measures proposed by new CEO Dara Khosrowshahi, including one that could have prevented Kalanick’s return as CEO, were dropped before the meeting.
- The board also approved a resolution to go public by 2019. Uber was last valued at US$69 billion.
Why it matters:
- This may have defused a boardroom battle between Kalanick and early investor Benchmark, one of the main movers in forcing a change at the top. But Kalanick had special voting rights, because of a special class of Uber stock he owned. He used this to appoint two members to the board before yesterday’s meeting, without discussing it with new CEO Dara Khosrowshahi and the rest of the board.
- SoftBank’s investment will make it an investor in Uber as well as its Southeast Asian rival Grab and Indian rival Ola, in which the Japanese giant is investing US$2 billion in a new round.
- Uber going public would be one of the biggest tech IPOs and potentially a litmus test for other unicorns which have delayed their IPOs.
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