Uber Technologies Inc. shareholders have agreed to sell a significant stake to Japanese Softbank Group.
That company is controlled by Masayoski Son. He's a billionaire technology player who has invested heavily in the worldwide ride-sharing category.
The transaction is scheduled to close in January 2018.
As Bloomberg points out, the benefits to Uber are huge. They include:
- Fresh infusion of cash
- Preventing increasingly aggressive competitor Lyft from getting funding from SoftBank
- Easing discontent among early backers
- Calming down tensions between management and the board
- Strengthening the leadership of newbie chief executive officer Dara Khosrowskhahi.
But Uber is paying through the nose, to use the cliché, for this arrangement.
For instance, Bloomberg notes:
" ... Softbank and investors ... are buying existing Uber stock at a valuation of about $48 billion - well below the last financing round of $69 billion."
Also saved has been startup Theranos. It has secured a $100 million loan from Fortress Capital.
Takeaway: Never underestimate the leadership of startups.
Get a second opinion about your marketing and advocacy communications. No pressure. No charge. Please contact Jane Genova, email@example.com or @genova_jane.