- REUTERS/Danish Siddiqui
- It’s been a good day for the former Uber CEO Travis Kalanick.
- A deal with perhaps the most powerful investor in tech, one that had been in the works for months, closed on Thursday.
- That deal dropped a cool $1.4 billion in cash into Kalanick’s pocket and will soon end a contentious lawsuit with his biggest investor, Benchmark.
- Kalanick’s first order of business is setting up a charitable foundation and donating a big chunk of his money to it, Business Insider has learned.
Uber confirmed on Thursday that its investment deal with the Japanese tech giant SoftBank had closed.
SoftBank dropped $1.25 billion into Uber’s coffers and bought about 15% of the company from existing shareholders, including one of its biggest: Travis Kalanick, Uber’s cofounder and former CEO.
Kalanick had never sold a share of Uber before this deal and was the only early-employee shareholder who had never cashed out during secondary offerings that allowed employees to sell shares.
But he sold about one-third of his stake to SoftBank, and has received a $1.4 billion payout. He still has the remaining 70% of his stake, or roughly 6% of the company, Business Insider has learned.
Kalanick was forced to resign as CEO in June after a series of scandals rocked the company. Uber’s largest venture investor, Benchmark, led an investor revolt demanding his resignation.
Though he was a multimillionaire from the sale of his previous startup, Red Swoosh, he was relatively cash-poor after his Uber resignation, people close to him told us – cash-poor for a billionaire, that is.
Most of his wealth was paper money, billions of dollars’ worth of stock in Uber, and financial interests in several other startups in which he is an angel investor.
Now that his cup runneth over with cash, Kalanick plans to donate a significant amount of this $1.5 billion to a charitable foundation he’ll set up, though there’s no word yet on what its philanthropic focus will be.
With the SoftBank deal closed, a host of governance changes will go into effect at Uber, including Benchmark’s agreeing to drop a lawsuit against Kalanick over his control of two board seats.
When that happens, Kalanick, who is still a board member, will still technically control those two seats, meaning he’ll be able to recruit people for them. But under the new governance rules, they cannot be filled without a majority vote from the board.
SoftBank is also gaining seats on Uber’s board, which will now include a whopping 17 seats.
Another major change: No board members will keep super-voting rights for preferred shares (which granted 10 votes for each share, sources tell us). Kalanick owned these shares. So did Benchmark and other early investors.
Business Insider previously reported that Kalanick was on board to give up some control in exchange for the closing of the SoftBank deal, particularly important to him because SoftBank had threatened to instead invest in Uber’s top competitor, Lyft.
Uber’s board also promised SoftBank it would start the process for an initial public offering in 2019.