Super Pumped: The Battle for Uber

by Mike Isaac

From her side, David Bonderman piped up. Until that moment, he and Gurley had been quiet, letting Huffington present her section of the report. But a thought popped into his head. “I’ll tell you what it shows,” Bonderman said. “It’s that it’s much likelier to be more talking on the board.” The room froze. Had one of Uber’s board members just made a sexist comment about women talking too much? The audience was stunned; Bonderman, a seventy-five-year-old white billionaire hedge funder from Fort Worth, Texas, was dunking on women in the middle of the board’s company-wide presentation about changing Uber’s misogynist culture. Bill Gurley, who was standing behind Bonderman, shook his head.

The two investors knew Kalanick meant it. But so did they. When Cohler and Fenton presented him with the letter, the syndicate started a ticking clock. It was currently close to noon. They gave Kalanick an ultimatum: They needed an answer by the end of the day, around 6:00 p.m. If he declined to answer, if he took too long, if he tried to stall them further—if he did anything that seemed like an underhanded maneuver—the venture capitalists would walk out of the room, text members of the syndicate and immediately spin up the communications machine to take the fight public. By the next morning, the fight would be on the front page of the New York Times. Word would spread fast, and other investors—emboldened by the hard-line stance taken by Uber’s largest shareholders—would ultimately join them.

In December, Son reached a deal with Khosrowshahi and Uber’s board, in which SoftBank would purchase some 17.5 percent of Uber’s overall shares in what was called a tender offer, a way for outsiders to buy stock from existing shareholders in the company. The SoftBank shares would come from a group of people, including employees who were long waiting to sell but couldn’t due to Kalanick’s restrictions. They would come from investors like Benchmark, First Round, Lowercase, Google Ventures, and other early Uber investors. Most importantly for Son, SoftBank would purchase those shares at a steep discount from Uber’s valuation earlier in the year. Son and Khosrowshahi settled on a purchase price of $33 per share, pegging Uber’s valuation at about $48 billion—a steal for SoftBank. That meant that the scandals of the previous twelve months had knocked about $20 billion off Uber’s private market value. To keep the price propped up on paper, investors did some sleight-of-hand maneuvering. SoftBank would purchase $1.25 billion in additional, newly issued shares at Uber’s previous existing valuation of $68.5 billion. The premise was absurd; the secondary market clearly valued Uber’s shares at far lower than they were before Uber’s 2017 from hell. Yet in the eyes of the market, the maneuver worked; Uber’s valuation would remain at $68.5 billion.

It took two days to finalize the negotiations. While the whole world knew Uber wanted Khosrowshahi as its next chief, he still hadn’t agreed to take the job; he could extract steep concessions from the company as conditions for his acceptance. He wound things down at Expedia, enhanced his new contract, and prepared to meet his new company. Khosrowshahi negotiated himself quite a package as a result; if he was able to take Uber public by the end of 2019—roughly two years from his hiring—at a valuation of $120 billion, Khosrowshahi would net a personal payday of more than $100 million.