Categories: BoardsGovernance

Sonnenfeld: Uber Investment Deal May Not Mean Smooth Sailing

Uber’s announced investment deal with Japan’s SoftBank Group yesterday indicates that while former CEO Travis Kalanick and Uber investor Benchmark have found some common ground, the company could still face some unsettled seas as it gears up for an IPO.

The deal, which could be worth up to $10 billion, would mark the end of a legal battle between Kalanick and VC investor benchmark. Once the deal is closed, it’s been reported that Benchmark would drop its lawsuit against Kalanick, while the former CEO would need to receive approval from a majority of Uber’s board when he wants to replace the board seats over which he has control.

But while deal brokered in part by current Uber CEO Dara Khosrowshahi means peace on the board for now, there could be some lingering resentments under the surface.

“I believe that this board continues to be a smoldering cauldron of mistrust between the founders and the venture capitalists,” senior associate dean for leadership studies at the Yale School of Management Jeffrey Sonnenfeld told Chief Executive.

“There may be a lurking future confrontation over this possible strategic plan.” – Jeffrey Sonnenfeld

In the long run, Sonnenfeld believes that investors will ultimately look to have Uber controlled by the surging ridesharing tech rival Didi Chuxing of China, which has been expending its global reach. Uber merged its Chinese business unit with Didi in 2016.

“While Uber was frozen out of China, forced to sell out to Didi, Didi continues to spread globally,” Sonnenfeld says. “There may be a lurking future confrontation over this possible strategic plan.”

Khosrowshahi said last week that he has full support from Uber’s board to move forward with an IPO in 2019, so the expansion of the company’s overseas operations bears monitoring in the year ahead.


Patrick Gorman

Patrick Gorman is managing editor of Chief Executive magazine and Corporate Board Member magazine. He is based in Stamford, CT.

Share
Published by
Patrick Gorman
Tags: Uber

Recent Posts

From Supply Chain Chaos To Global Growth: How Women Executives Are Shaping Industrial Manufacturing

Innovation in manufacturing is not just about machines or technology; it’s about people.

2 days ago

CEO Health Checklist: The 8 Brain Must-Dos

It controls thought, movement and emotion. Here’s how to protect it and maximize its performance.

2 days ago

Pivoting To Partnerships: Why A Partner-Led Sales Model Can Fuel Your Growth

Changing sales strategy requires a new mindset, different skills and a thoughtful approach to execution.…

5 days ago

Why I Treat Talent Like A Dynamic Asset, Not A Fixed Resource

Freedom Trail Capital co-founder Samyr Laine on the qualities he looks for in founders—from adaptability…

5 days ago

Leadership Lessons From The Football Field: Build Teams, Not Followings

Both on the field and in the C-Suite, success hinges on work ethic and a…

6 days ago

A CEO’s Guide To Sustaining Change Over Time

Resistance doesn’t end after kickoff—it evolves. To lead lasting transformation, CEOs must stop treating pushback…

6 days ago