Uber's agreement with SoftBank paves way for multibillion-dollar investment into company

Uber confirmed on Sunday (12 November) that it has reached an agreement with a group of firms led by Japanese tech giant SoftBank Group, inching closer to a multibillion-dollar investment from the companies, according to a report in TechCrunch.

The deal would see SoftBank and other firms investing about $1bn (£0.76bn) in the company and following up with a tender offer over subsequent weeks.

Under the secondary offer, the companies plan to offer up to $9bn (£6.87bn) for buying shares from company's many shareholders, which includes former and current employees, venture capitalists and others.

"We've entered into an agreement with a consortium led by SoftBank and Dragoneer on a potential investment," a spokesperson for the ride-hailing giant said in a statement.

"We believe this agreement is a strong vote of confidence in Uber's long-term potential. Upon closing, it will help fuel our investments in technology and our continued expansion at home and abroad, while strengthening our corporate governance."

Although the buying price of the shares has not been determined, it is worth noting that the offer could still fall if sufficient shareholders aren't ready to sell their shares.

The deal would mean a major funding boost for Uber, which would look forward to using the pumped resources to fuel its growth before going public, which is expected to be sometime around 2019.

Among other benefits, the deal would also end the legal battle between one of Uber's early investors Benchmark Capital and its ex-CEO Travis Kalanick. Benchmark Capital had sued Kalanick, alleging that the former CEO misled investors to gain control over three board seats. The investor had agreed to drop the lawsuit if the deal comes through.

As SoftBank is also an investor of Ola and Grab – Uber's rivals in India and Southeast Asia – the deal could also help the company expand its footprint in these regions.