It’s not just SoftBank and Dragoneer that are looking to buy Uber shares from the employees and other shareholders when the tender offer launches, likely later today. Sources tell us that Sequoia Capital is looking to increase its stake in Uber this way. The other investors on the list include Tencent and TPG.
SoftBank has made an offer to purchase the shares at $32.96. This is a steep discount to the $48.77 from the latest Series G round. The group of investors are looking to buy about $8 billion in shares. If they do not find enough sellers to meet the $8 billion, it’s possible that they will increase the offer price. There’s also a $1 billion direct investment in Uber, which would value the company at its last private valuation of nearly $70 billion. Sequoia has previously invested in Uber through its “scout” program, which involves covertly finding deal opportunities through its network. Alfred Lin, a partner in Sequoia, also made an angel investment at the seed stage. He previously lamented that Sequoia overlooked Uber. Sequoia declined to comment. Uber declined to comment.
For many Uber shareholders, the secondary offering will give them the opportunity to turn paper riches into cash. These include current and former employees, venture capitalists and angel investors. But they’re only eligible to sell if they have at least 10,000 shares. They also need to be “accredited investors,” which means that Uber employees who make less than $200,000 in salary will also need to have $1 million in assets (this includes the value of the shares). The $1 billion investment in Uber will also help the company continue to fuel its growth as it prepares to go public in 2019.
This is a big moment for Uber, in what has otherwise been a very difficult year. Uber has had countless legal battles, including a patent lawsuit with Alphabet’s self-driving car division. There’s also been public outcry about its company culture . Co-founder and CEO Travis Kalanick was pressured to step down in June. If the deal is completed, investor and board member Benchmark Capital plans to drop its lawsuit against Kalanick. The suit is related to Kalanick’s power to appoint three board seats, including his own. Kalanick recently named Ursula Burns and John Thain to those seats. If one of them gives up their spot, Kalanick will require a board vote to appoint a replacement, as long as the SoftBank deal is finalized.
