SAN FRANCISCO — Uber is in talks to promote a stake in its self-driving applied sciences unit to SoftBank and different buyers for as a lot as $1 billion, because the ride-hailing firm prepares to go public, in keeping with 4 individuals with information of the matter.
The talks are nonetheless underway and should not lead to an funding, mentioned the individuals, who requested for anonymity as a result of they weren’t licensed to talk publicly. Aside from SoftBank, the investor consortium contains an automaker, they added.
Underneath the phrases of the proposed deal, buyers would buy from a pool of Uber inventory particularly earmarked for the self-driving applied sciences unit. Uber would preserve majority management of the self-driving arm and would use the funding to fund its analysis and improvement. The deal would worth the self-driving enterprise at $5 billion to $10 billion, the individuals mentioned.
Uber filed confidentially to go public in December in what could be one of many largest tech preliminary public choices of latest years. The corporate, based mostly in San Francisco, may hit a valuation of $120 billion when it reaches the inventory market.
However Uber is underneath scrutiny for its losses — its web loss was $842 million within the fourth quarter — and self-driving applied sciences are costly. A $1 billion infusion may ease worries about how pricey it’s to develop autonomous automobiles.
The proposed funding was earlier reported by The Wall Avenue Journal.
Uber has for years invested closely in self-driving automobiles, which it has mentioned will ultimately develop into a main mode of transportation, changing its human drivers. However its autonomous unit, shaped in 2014, loses between $100 million and $200 million every quarter. Its fleet of autos was additionally grounded for 9 months final yr after one of many autonomous automobiles struck and killed a pedestrian in Arizona. Previously, Uber has thought of spinning off the unit as a separate entity.
Uber Freight, the corporate’s long-haul trucking enterprise, additionally has a separate valuation based mostly on swimming pools of fairness particularly earmarked for the unit. As a part of an settlement with staff, the corporate rewarded them with fairness in Uber Freight as a stand-alone enterprise late final yr.
SoftBank is already a significant investor in Uber after it acquired about 17.5 p.c of the ride-hailing agency’s inventory final yr at a major low cost. Along with Uber, SoftBank has poured cash into ride-hailing corporations comparable to Ola in India and Seize in Southeast Asia.
SoftBank has additionally invested in companies targeted on autonomous autos. In mid-2018, the agency invested $2.25 billion in GM Cruise Holdings, a division of Normal Motors. Structuring Cruise as a separate entity made it doable for Normal Motors to isolate the losses from its autonomous division.
In August, Toyota invested $500 million in Uber. The transfer was meant to let Uber put its self-driving expertise in Toyota autos.
“Toyota always critiques and considers varied choices for funding, however we do not need something to announce a few additional funding in Uber right now,” a Toyota spokeswoman mentioned on Wednesday.