Uber Backers Said to Discuss Stock Sale to SoftBank and Others

Uber shareholders and its board, led by early backer Benchmark, have discussed selling some of their shares to SoftBank and other potential investors, according to Bloomberg, citing people familiar with the matter.

The talks represent a major turning point for the company. It has amassed more than 500 investors who fought to own a piece of the world’s most-valuable startup. The fact that some of the earliest backers now want to reduce their stakes suggests the scandals and other troubles this year have taken a toll.

The deal could include an injection of new money into the ride-hailing startup, the people said. It’s unclear what valuation those shares would carry or how much may be sold. Any private share sale like this would need to be approved by Uber’s board.

Uber’s former CEO Travis Kalanick, who remains on the board, didn’t learn about Benchmark’s effort to sell early shares until recently. Kalanick has often opposed allowing early shareholders to sell their stakes, though the board has allowed occasional exceptions.

SoftBank, which recently launched a $93 billion technology fund, has no plans to invest in Uber, a person close to the Japanese company said. SoftBank has backed Uber’s primary rivals in India, Southeast Asia and China. Some of Uber’s investors would like to see the startup cut deals with overseas competitors, as it did with Didi Chuxing in China and Yandex in Russia. Grab, a leading ride-hailing startup in Asia, is raising as much as $2 billion from backers including SoftBank and Didi.

Further complicating the situation: One of Uber’s major late-stage investors, the Saudi Public Investment Fund, is also the largest backer of SoftBank’s new tech fund. Two smaller, longtime Uber investors have also started asking larger investment funds to purchase their shares. These backers are concerned that a leadership vacuum and growing competition from Lyft will dent Uber’s value.