Uber-rich: the wealthy people who will get even wealthier from IPO
Uber on Thursday priced its shares at $45 each on its Wall Street debut, valuing the company at a disappointing $80.4bn.
While its value could rise on the first day of trading, the figure is well below Uber’s initial $100bn target as investors got the jitters about the lacklustre performance of the float staged by its rival Lyft in March.
By issuing 180m new shares at that price, the ride-hailing app will raise around $8bn to fund its growth plans. The float also means that a cadre of early investors will make billions of dollars between them.
While the San Francisco-based firm is offering some of its most loyal drivers cash bonuses, most of the soon-to-be Uber rich are already, well, uber-rich. Here’s a rundown of some of the biggest names, and what their stakes in the rise-share business will be worth:
Uber’s co-founder was ousted from the driver’s seat in 2017 amid allegations that he presided over a culture of sexual harassment and gender discrimination. The former boss is expected to be persona non grata on the balcony of the New York Stock Exchange on Friday when company executives celebrate by ringing the opening bell. But as the largest individual shareholder, with 6.7% after the float, he will still be the undisputed winner of the day. His stake is worth a fraction under $5.3bn and he will sell 3.7m shares out of that, raising nearly $166.5m in cash. In 2018, he sold about 29% of his original stake to SoftBank, pocketing $1.4bn.
Value of stake: $5.3bn
Like Kalanick, Uber’s other founder had already successfully exited a startup before he launched the ride-hailing app. The Canadian entrepreneur sold his first company, StumbleUpon, to eBay for $75m in 2007. While it’s not clear how much of that went to Camp, he had enough to buy the company back from eBay two years later, at a significantly reduced price. His 6% stake, worth nearly $3.7bn, will fall to 4.6% after the float but he’ll remain the second largest individual shareholder. Camp plans to sell 3.1m of his shares, raising nearly $139.5m.
Value of stake: $3.7bn
The Public Investment Fund, which invests Saudi Arabia’s vast oil wealth, is one of the two biggest investors in Uber. It sank $3.5bn into the company in 2016 and will not sell shares in the float, leaving it with a 4.3% stake worth $3.27bn. The fund’s chief executive, Yasir bin Othman Al Rumayyan, has a further 122,489 shares, worth $5.5m. The relationship between Uber and Riyadh has held firm, despite the Uber CEO, Dara Khosrowshahi, pulling out of Saudi Arabia’s “Davos in the Desert” conference over the murder of journalist Jamal Khashoggi.
Alongside their directly held stake, the Saudis also provided nearly half of the funding for the $100bn Vision Fund, run by Japan’s SoftBank.
Value of stake: $3.3bn (excluding share in SoftBank Vision Fund)
SoftBank Vision Fund
With a stake of 16.3% pre-float, a Cayman Islands-based entity owned by SoftBank’s Vision Fund is the largest single investor in Uber. The $100bn fund was set up by Japanese bank SoftBank to pour cash into startups that could be the business behemoths of the future. Alongside Uber, it has bought stakes in WeWork, chipmaker Arm Holdings and Nvidia. Saudi Arabia provided around $45bn of the money for the $100bn fund. It will sell 5.45m shares to new investors for $245m from a holding worth $10bn at the float price. It will still own 12.8% of the company.
Value of stake: $10bn
Amusingly, the prospectus for the float details a legal settlement between Uber and Google’s autonomous vehicle venture Waymo, a rival to Uber’s plans in that arena. Waymo had accused Uber of nabbing its trade secrets, something Uber promised not to do in future as part of an agreement that also saw it hand over $245m in stock. But Alphabet, Google’s parent company, owns much more of Uber than that.
It isn’t selling any shares at float but the issuance of new stock will dilute its holding to 4.2%, mostly held through its Google Ventures investment arm. Its stake will be worth $3.2bn.
Value of stake: $3.2bn
The founder-boss of Amazon is the world’s richest person with an estimated net worth of around $160bn. His wealth has been somewhat cut down to size, courtesy of an estimated $36bn divorce settlement with ex-wife MacKenzie. Luckily for Bezos, he was an early believer in Uber, reportedly invested $3m in a 2011 funding round that valued the company at $346.5m. That would make his stake worth around $692m, although his holding is not declared in regulatory filings.
Value of stake: $692m
Lowercase Capital/Chris Sacca
The founder of venture capital firm Lowercase Capital is best known to the general public as the cowboy-shirt-clad “guest shark” on Shark Tank, America’s answer to Dragon’s Den. But the longtime investor and venture capitalist built a reputation in Silicon Valley for his early investments in successful startups including Twitter and Instagram.
Lowercase’s stake will be worth nearly $2bn on Friday morning, when it plans to sell 1.67m shares for $75m, leaving it with 2.5% of the company.
Value of stake: $2bn
Benchmark Capital/Matt Cohler
Cohler was a founding member of LinkedIn and later became one of the first five people to be hired by Facebook, before leaving in 2008 to join venture capital firm Benchmark. He is Benchmark’s representative on the Uber board. The investment firm is thought to have sunk $9m into a 2011 funding round and has already cashed in by selling $900m of stock. It is still sitting on a stake worth about $6.75bn but will sell 5.75m shares in the listing, cashing in to the tune of $259m. It will own 8.5% after the listing, the second largest investment after Saudi Arabia’s.
Value of stake: $6.75bn
The businesswoman and author, who founded American news website the Huffington Post, sits on the board of Uber. Former Uber boss Kalanick recruited her in 2016 and she wrote a highly complimentary blog post about their friendship and business relationship. She has 22,000 shares, worth a mere $1m at the float price. The company’s prospectus says she won’t be selling them on the day because they are locked until the end of May.
Value of stake: $1m
Thain was at the help of Wall Street bank Merrill Lynch when it ran into the ground, saved from collapse only by an emergency merger with Bank of America. He became something of a pantomime villain over claims that he protected bankers’ bonuses and that he spent $1.2m renovating his office even as the bank hurtled towards disaster. He could renovate nearly five offices if he sold his holding, worth $5.85m. However like Huffington, he can’t do so until the end of May. Tough break.
Value of stake: $5.85m
Celebrities known to have invested in Uber include Beyoncé and Jay-Z, Lance Armstrong and Troy Carter, the former manager of Lady Gaga. Their stakes are not disclosed.
Armstrong has said that investing in Uber saved his family’s finances after his lucrative sponsorship deals dried up after he admitted using performance-enhancing drugs. Bloomberg has estimated that Armstrong invested $100,000 and has seen the value of his stock increase to at least $20m.
Value of stakes: Unknown