SAN FRANCISCO • As private companies, Uber Technologies Inc and Lyft Inc became markets unto themselves, where investors poured in capital and traded stakes worth billions of dollars. Since both companies filed paperwork confidentially last Thursday for an initial public offering (IPO), several investors are poised to cash in on their bets next year in a big way.
The filings submitted by Uber and Lyft aren’t yet public, but people familiar with each business outlined the largest shareholders. They aren’t, for the most part, Silicon Valley venture capitalists (VCs). The top holders of America’s main ride-hailing companies are both from Japan: SoftBank Group Corp and Rakuten Inc, said the people, who asked not to be identified because they weren’t authorised to discuss the information publicly.
Matt Kallman, a spokesman for Uber, and Alexandra LaManna, a spokeswoman for Lyft, declined to comment.
SoftBank, a Japanese conglomerate run by Masayoshi Son, owns more than 15% of Uber. Rakuten, an e-commerce company that began amassing a sizeable stake in Lyft when the start-up appeared to be an also-ran, now owns more than 10%. Together, their stakes would be worth at least US$13 billion (RM54.6 billion). Japan has the largest taxi market in the world, but the government has effectively shut out most ride-hailing companies. That, perhaps, encouraged investors there to look westward.
American VCs will still have plenty to celebrate, especially those at Benchmark and Andreessen Horowitz. Benchmark, an early Uber investor, is poised to generate a historic return. The firm is the second-largest owner of Uber with more than 5% of shares. Lyft counts Andreessen Horowitz among its top five shareholders.
Uber’s bankers have said the company could be worth US$120 billion in an IPO, while Lyft is targeting US$18 billion to US$30 billion, people familiar with the matter have said. Here’s a breakdown of each company’s backers:
Uber’s Largest Shareholders
SoftBank spearheaded the largest equity transaction ever in a VC-backed start-up when it led a deal worth about US$9 billion with Uber and its investors in January. SoftBank’s investor consortium purchased about US$8 billion from Uber investors and US$1.25 billion in new shares in January.
SoftBank invested using a somewhat convoluted financial structure but has planned to transfer ownership to its US$93 billion Vision Fund, of which Saudi Arabia is the biggest single backer. Benchmark is the second-largest backer after SoftBank.
The VC firm helped oust Travis Kalanick as CEO last year. Benchmark partner Bill Gurley resigned from the board after the power struggle and another partner, Matt Cohler, took the seat in his stead. Uber co-founders Kalanick and Garrett Camp are the third- and fourth-largest Uber shareholders respectively.
Even though Kalanick sold 29% of his stake, worth about US$1.4 billion, in the SoftBank deal, he still owns more than 5% of the company he helped build. Both men are on Uber’s board.
The Saudi Arabian government owns more than 5% of Uber through its Public Investment Fund. That’s on top of its large stake in SoftBank’s Vision Fund. Yasir Al-Rumayyan, MD of the sovereign wealth fund, sits on Uber’s board. The relationship drew scrutiny after the assassination of journalist Jamal Khashoggi by Saudi agents in October.
Alphabet Inc is the company’s sixth-largest shareholder. Google’s parent company has acquired a large position in Uber over the years, first with an investment through its VC arm, GV, and later as part of a settlement in its lawsuit with Uber over self-driving cars. Other investors with significant ownership stakes include First Round Capital, TPG, Fidelity Investments, Tiger Global, Coatue Management, General Atlantic, Glade Brook Capital Partners, Dragoneer Investment Group and Lowercase Capital.
Lyft’s Largest Shareholders
The e-commerce company Rakuten owns more than 10% of Lyft. Rakuten CEO Hiroshi Mikitani sits on the ride-hailing company’s board. When other investors were nervous about Lyft’s future, Rakuten doubled down on the second-place player. General Motors Co (GM) invested US$500 million in Lyft a couple years ago. It was supposed to be the start of a beautiful friendship, where the two companies would work together on self-driving cars and auto leasing. Instead, that relationship has frayed. But GM stands to make out well from its investment.
Mutual fund manager Fidelity owns a stake in both Uber and Lyft, though it has a significantly larger percentage of Lyft, with more than 5% of shares. Andreessen Horowitz invested in Lyft back in 2013. The VC firm has bought and sold shares since then. It still owns more than 5%, unlike another VC firm, Peter Thiel’s Founders Fund, which also bought in early but has a smaller stake today.
Lyft co-founders Logan Green and John Zimmer together own about 7% of Lyft shares. They had to give up a great deal of control over the years to fund an expensive rivalry with Uber.
Other significant investors include Alphabet, through the investment fund CapitalG, and VC firm Mayfield Fund.