SAN FRANCISCO • Uber Technologies is in exclusive talks to line up funding from four investors, but a deal, which could reach as much as US$12 billion (S$16.4 billion), hangs on the outcome of a courtroom brawl between two board members.
Funding would come from Japan's SoftBank Group and Chinese ride-hailing juggernaut Didi Chuxing, along with United States equity firms Dragoneer Investment Group and General Atlantic, said people familiar with the matter.
Goldman Sachs Group is advising Uber on the potential transaction. China's Tencent Holdings has also explored contributing funds to the round.
An investment is expected to raise US$1 billion to US$1.5 billion for Uber at the same valuation as last year's, said the people, who asked not to be identified because the discussions are private. A second component of the deal would allow a swathe of current shareholders to cash out at a lower price.
Investors could spend US$2 billion to US$10 billion buying out shareholders' stock, a wide range that depends on demand from sellers, said one of the people.
A transaction hangs on Uber's ability to resolve an ongoing fight between two of the company's largest shareholders and most influential board members, two of the people said. Venture capital firm Benchmark is suing Mr Travis Kalanick, Uber's former chief executive who was ousted in June.
Benchmark claims Mr Kalanick defrauded investors and withheld information from directors when he sought to create three board seats last year, according to the complaint. Mr Kalanick denies the allegations in a statement and says he is "disappointed and baffled by Benchmark's hostile actions".
New investors may be given the power to appoint as many as two representatives to Uber's board, the people said. But the lawsuit poses major complications. An outstanding question is whether Mr Kalanick would relinquish his seat or the two empty ones under his control, which is the focus of Benchmark's suit, or if new seats would be created. Two people said Mr Kalanick is supportive of an investment involving SoftBank, which has a mega fund of nearly US$100 billion to spend on technology deals.
If Uber's directors can resolve their dispute quickly, the two-pronged deal would allow the company to retain its valuation of about US$70 billion on paper, while also giving panicked shareholders a way out.
The four would-be investors in the new funding round are currently in the due-diligence period, and terms of the deal are still being discussed. The amount spent on shareholders' equity and the price for their stock will depend on seller interest, the people said.
SoftBank is a major backer of ride-hailing companies in India, South-east Asia and China. Didi and Uber agreed to a ceasefire in China a year ago and became mutual shareholders in each other's businesses. Uber remains in a fierce, money-losing fight with India's Ola and South-east Asia's Grab.