Japanese giant Softbank (TYO: 9984) is to invest a $9 billion in Uber, in a victory for the Chief Executive Dara Khosrowshahi.
The group will buy most of the shares from early investors and have agreed to a 15 percent stake in the car-hailing app.
“We look forward to working with the purchasers to close the overall transaction, which we expect to support our technology investments, fuel our growth and strengthen our corporate governance,” said Uber.
SoftBank will take two seats on the board and the deal will close in early 2018.
This is a positive end to 2017 for Uber, who have had a difficult year following sexual harassment scandal, investigations by regulators and a lawsuit over allegedly stolen technology, and a potential ban in London.
SoftBank has made several investments in different in ride-sharing companies including China’s Didi Chuxing and Southeast Asian taxi-hailing app Grab.
Erik Gordon an entrepreneurship expert at the University of Michigan’s Ross School of Business, said of the deal: “The stockholders did the smart thing. The price is less important than locking in the governance changes and securing the support of the world’s most powerful technology investor,”
Khosrowshahi took on the role in August after Travis Kalanick was forced to step down in June. He helped negotiate the deal, which is a critical step for Uber as the firm is also planning an initial public offering in 2019.
In the third quarter of 2017, Uber’s net losses stood at an impressive $1.5 billion. This was helped by the company’s mounting legal costs, while revenues increased to $2 billion.
2018 will see hearings on Uber’s legal status in London as well as the public trial in the lawsuit in which rival Waymo has accused the car-hailing app it of steal self-driving trade secrets.