Uber wants to go public, but SoftBank is waiting for two board seats

David Paul Morris | Bloomberg | Getty Images

Dara Khosrowshahi, chief executive officer of Uber Technologies.

Between the stock market’s extreme volatility of late and the three-week-old government shutdown, the IPO market faces plenty of uncertainty in 2019. But for Uber, there’s another complicating aspect — the company’s biggest investor is still waiting for its board seats.

When Uber sold a 15 percent stake to SoftBank last January, the ride-hailing company agreed to give the Japanese conglomerate two board positions out of an eventual total of 17. SoftBank said its seats would go to Marcelo Claure, the company’s operating chief and executive chairman of Sprint, and Rajeev Misra, the head of SoftBank’s Vision Fund.

More than a year later, SoftBank is waiting for the U.S. government to give Claure and Misra the go-ahead. SoftBank has its Uber shares, but the broader deal is under review by the Committee on Foreign Investment in the United States (CFIUS), a unit of the Treasury Department that reviews certain transactions involving overseas investors.

The CFIUS process is slow even in normal times, and with the federal government in the midst of a partial shutdown, there’s no telling when Uber will get a response. As Uber gears up for a massive IPO, which is expected to come this year, it’s doing so without representation from its top shareholder, adding a significant wrinkle to an already complex environment.

“Investors would clearly want to be involved in the IPO process because there will be things negotiated with underwriters that will demonstrably affect their securities and the liquidity of their securities,” said David Golden, a partner at Revolution Ventures in San Francisco and former head of tech investment banking at J.P. Morgan. Public market investors “are going to want to know who represents corporate governance, given the long history at Uber,” he said.