Growth Guerrillas

Softbank finally names a number

SoftBank Group Corp. has told stakeholders in Uber Technologies Inc. that it would initially offer to buy shares at a nearly 30% discount to the company’s most recent valuation of $68 billion, according to a person familiar with the matter.

After months of back and forth, Softbank is offering to buy Uber shares at a $50 billion valuation. We’ll see if Uber shareholders accept a 30% discount on its latest round.

Although I often cringe at Silicon Valley-style “growth” conversations, the math on the big winners — Uber, Facebook, Google, a few others — is incredible.

Benchmark led Uber’s Series A round in 2011. In this and subsequent rounds, Benchmark invested $27 million in Uber. Its stake is now worth $8 billion.

Benchmark a few months ago projected that, within two years, Uber would be worth $100 billion. If the math stays steady, Benchmark’s stake in Uber would be worth ~$13 billion. In eight years, Benchmark’s $27 million investment would be worth ~$13 billion.

For all the headaches-turned-risks — poor leadership, lawsuits, fierce competition — Uber’s early investors have earned enormous returns. And that’s the venture investment bet.