Who wins in an Uber IPO?
According to reports from Wall Street, the ride sharing outfit is aiming to go public in early 2019. An IPO is long overdue for the decade-old company that has engaged in brawls with regulators around the world, adopted questionable growth tactics, and provided an unending stream of drama for news media coverage. Investors have backed Uber through thick and thin, helping it transform from a Silicon Valley start-up to a pioneer at the forefront of revolutionizing public transportation.
According to Crunchbase, Uber has raised a total of $22.2 billion over 20 rounds. The latest one occurred as recently as August of this year, when it raised $500 million from Japanese automaker Toyota Motor Corporation (TMC) at a valuation of $71.2 billion. Now it may be time for those investments to pay off, as major investment firms have valued Uber's IPO at $120 billion.
Here are three of the biggest winners from an Uber IPO.
SoftBank Group Corp.
The Japanese venture fund became Uber’s biggest investor last December, when it snapped up a 15% stake in the company for a funding round of $7 billion. Softbank (SFTBY) invested $1.25 billion at a $70 billion valuation for Uber and picked up shares from earlier investors at a discounted $48 billion valuation. Softbank’s investments effectively halted a lawsuit filed by Benchmark Capital, Uber’s second-largest investor, against the company’s co-founder and CEO Travis Kalanick. The fund has also invested in a number of other ride-sharing companies around the world, such as India’s Ola Cabs and China’s Didi Chuxing. In fact, some reports have anointed the company “the real king of ride sharing”.
The Menlo Park-based venture firm has been an early investor in several blockbuster companies over the years, including Twitter (TWTR) and eBay (EBAY). Benchmark Capital was also an early investor in Uber and led a $11 million round in February 2011 when Benchmark General Partner Bill Gurley joined the startup’s board of directors. The firm also became a vocal supporter of Uber co-founder Travis Kalanick in his battles with local governments. That was until last year, when Benchmark became an instrumental player in driving Kalanick out the company after he sought to change the structure of Uber's board of directors. A subsequent deal curtailed powers for both the venture fund as well as Kalanick. Last year’s Softbank deal also saw Benchmark's share of Uber’s stock decline from 13% to 11%, but the firm still remains the company’s second-biggest shareholder.
Among the most colorful of CEOs in recent times, Kalanick was the public face of Uber during its formative years. His hard-charging personality, confrontational style, and abrasive tactics became the company’s trademark and were responsible for its stratospheric growth in less than a decade. But the dark underside to that style became clearer in recent years as reports documented the company’s toxic culture and habit of playing loose with the rules. Kalanick himself overplayed his hand and in 2017 was booted out of the company he co-founded, but he still retains 7% of the company’s overall stock and is on its board of directors. That’s not a bad payout.