Uber Technologies Inc has secured a US$1 billion investment from three Japanese companies, ahead of an initial public offering expected next month.
Denso Corp, Toyota Motor Corp and Softbank Group Corp’s Vision Fund bought stakes in the self-driving unit, valuing the arm at US$7.25 billion, according to a statement.
The deal would help Uber, which tallied a US$3 billion operating loss last year, to continue funding a very costly endeavor.
Uber publicly filed a prospectus to go public last week and is expected to begin a road show to promote the stock before the end of the month. The offering could value Uber at about US$100 billion, people familiar with the matter have said.
The autonomous vehicle investment is the second major deal struck in the weeks leading up to the IPO. Uber chief executive officer Dara Khosrowshahi said last month that the company had agreed to acquire Middle Eastern rival Careem for US$3.1 billion.
With Uber remaining the majority shareholder in the autonomous vehicle venture, public investors would still be exposed to a substantial expense.
Uber spent US$457 million last year on technology investments, including the self-driving vehicle business.
However, the pre-IPO deal would help the company argue that the autonomous program is a valuable component of its business.
The deal is expected to close in the third quarter, Uber said.
Together, Toyota and the auto supplier Denso are to invest US$667 million, while Vision Fund plans to chip in US$333 million for the self-driving unit.
Softbank was already the largest shareholder in Uber, with a 16 percent holding. Toyota has a smaller stake.
Softbank has not been able to take two board seats at Uber that were granted as part of its investment more than a year ago. Due to an impending US national security review, Softbank might never get those seats, but it would have rights to join a new board as part of the autonomous vehicle deal.
The new corporate entity is to have a board compromised of six Uber-appointed members, one appointed by Toyota and one from Vision Fund, a person familiar with the matter said. That seat would also require US security approval.
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