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.
Sources speaking to Bloomberg, Recode and TechCrunch have learned that Uber and SoftBank have finalized a deal that should see SoftBank and an investment group pour $10 billion into the company ($1 billion directly, $9 billion buying existing shares) while limiting the control of former CEO Travis Kalanick.
Softbank would buy $1 billion in new stock and purchase shares from investors and employees worth up to 14 percent of the ride-hailing company. Now, the company has confirmed that Uber has sealed a multibillion dollar investment round from Japan. Uber now is valued at $68.5 billion, but stock offers will be based on a lower valuation, so it's unknown just how much the total multibillion-dollar deal will be worth, said the person, who spoke on condition of anonymity because details were not released.
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"We believe this agreement is a strong vote of confidence in Uber's long-term potential", it added. Benchmark had alleged that Kalanick duped investors into allowing him to create three disputed board seats that it later wanted to delete, which action would dump Kalanick out of Uber altogether. The terms were signed on Sunday, although the tender offer would likely take weeks to complete.
This new funding deal will only be done once enough Uber shareholders opt to sell their shares.
Although Kalanick quit as Uber chief exec, he remains on the board, having previously created the seat he now occupies.
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SoftBank is sending tremors through the tech world with its massive new Vision Fund, a venture capital fund intended for startups and expected to dominate the industry before long. Kalanick appointed them in September without first consulting with the board.
Uber plans to run newspaper ads informing investors about the share purchase, and SoftBank will propose a price at which it will buy stock.
The deal gives early investors such as Benchmark, whose Uber stake is worth almost $9 billion, the opportunity to cash out a very lucrative investment.
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That was when I was 16 years old, just because we just looked at each other", he added, prompting laughter from the audience. The Chief Executive also said he is excited to meet Trump. "You f**k with my countrymen, I won't let you off the hook".