Ahead of an initial public offering next month, Uber Technologies Inc. has secured a $1 billion investment from three Japanese companies.
Denso Corp., Toyota Motor Corp. and SoftBank Group bought shares in the company which they valued at $7.25 billion. Uber tallied a $3 billion operating loss this past year, and this investment will help to continue funding a very costly undertaking.
Uber publicly filed a prospectus to go public Week and is expected to begin a roadshow to promote the inventory before the end of the month. The offering could value Uber at approximately $100 billion, people familiar with the matter have said. The autonomous-car investment is the crucial second deal struck in the weeks leading up to the IPO. Uber Chief Executive Officer Dara Khosrowshahi stated last month that the firm had agreed to acquire Middle Eastern rival Careem for $3.1 billion.
With Uber staying the majority shareholder in the Autonomous-car venture, public investors will still be exposed to a substantial expense. Uber spent $457 million last year on technology investments, including the self-driving vehicle business. However, the pre-IPO deal will help the company to argue the autonomous program is a valuable component of its business.
The self-driving unit said the deal is expected to close in the third quarter. Toyota and the automobile supplier Denso will invest $667 million, while the SoftBank Vision Fund will add $333 million to Uber’s coffers.
SoftBank was the largest shareholder in Uber, now holding a 16 per cent stake. Toyota has a smaller share. SoftBank hasn’t managed to take two board seats at Uber which were allowed as part of its investment more than a year ago. Due to an impending U.S. national security review, SoftBank may never even get a seat at the table, but it will be able to join a new board as part of their autonomous-car deal.
Six uber appointed members will make up the board of the new corporate entity, as well as one appointed by Toyota and one from SoftBank’s Vision Fund, according to a person familiar with the matter. Those seats will also need U.S. safety approval.