Sprint Chief Executive Officer Marcelo Claure is joining Uber’s board of directors as part of SoftBank’s investment in the ride-hailing startup that will amount to over $10 billion, Recode reported Saturday. The largest private stock purchase in the history of trading is expected to clear by the end of the month and will see Uber’s board grow to 17 directors, up from 11. SoftBank will receive two seats following its financial commitment, with the other one being given to its Vision Fund CEO Rajeev Misra. The Japanese tech giant’s tender offer from last month was a resounding success by most standards and is interpreted as a win for both parties; SoftBank’s flagship fund received a significant stake in one of the world’s largest unicorn startups, whereas Uber found a partner that could help settle the global price war between various ride-hailing companies and push them toward finally making money due to its large investments in a number of such firms, many of which are directly competing with the San Francisco-based service provider.
Mr. Claure’s appointment to Uber’s board has yet to be officially confirmed but is likely meant as a reward for Sprint’s chief who helped stabilize the SoftBank-owned mobile service provider since taking over the company in 2014, even though his first anniversary as CEO gave him little reason for celebration, having marked T-Mobile’s rise that saw it surpass Sprint and take the title of the third largest wireless carrier in the United States which it still holds to this day. The other five seats set to be added to Uber’s board are yet to be awarded, according to recent reports. Mr. Claure was understood to have previously been considered as a candidate for Uber’s CEO role which was left vacant over the summer following the ousting of co-founder Travis Kalanick, having later been awarded to former Expedia CEO Dara Khosrowshahi.
SoftBank’s investment is expected to net the company at least 15 percent of Uber and is a relatively safe bet as far as record-breaking tech investments are concerned; despite discounting Uber’s 2014 valuation of $68.5 billion by 30 percent, SoftBank is still likely to profit from the move due to the startup’s ambitions to hold an initial public offering next year. Even if its previously highest valuation doesn’t hold up, the public markets are expected to be willing to recoup SoftBank’s investment and pay at least a small premium on top of it, provided the investor would even be willing to sell its stake so early.