Uber was last valued at $70 Billion dollars. However, Softbank is looking to invest $10 Billion dollars in Uber, by purchasing between 17% and 22% of the company from existing investors. That would mean Uber is worth only about $50 Billion, quite a haircut from its prior valuation. Benchmark, which owns 13% of Uber, has voted against the deal and is unlikely to sell any of its shares.
Softbank is already invested in ride hailing companies Ola and Grab Taxi in Asia, and is looking to add a U.S. company to its portfolio. They believe the introduction of autonomous vehicles in the next decade will be a boon for ride hailing companies.
The deal may still go through as a number of Uber investors, including co-founder Garrett Camp, are willing to sell some of their shares at the discounted price. Also, Uber is still on track to lose around $2.5 Billion this year. They have roughly $6 Billion in cash on hand. So, without a new cash infusion, either from an IPO or the SoftBank investment, Uber runs the risk of running out of cash sometime in 2019.
Perhaps that’s why Uber’s new CEO, Dara Khosrowshahi, wants to go public sooner rather than later.