Startups

Uber’s Frankenboard arrives

Comment

Image Credits: Spencer Platt (opens in a new window)

Today was a momentous day in Uber history. After much debate, rumors and strife over the past few weeks, it looks like the company and its shareholders have come to an agreement over a tender offer that will see SoftBank own nearly 15 percent of the company, while also injecting around $1 billion in fresh capital. That deal is expected to close in the new year.

The SoftBank tender offer was initiated after Uber’s board agreed to a set of governance changes back in early October, which included increasing the board’s size from 11 to 17. Those changes were reported to be contingent on SoftBank agreeing to invest in the company, which now seems like a done deal.

Although there are a lot of things that make Uber’s story unique, the size of its board is one that has gotten little attention, and could provide a whole new set of dynamics to watch for as the company moves toward stabilizing its future after a rash of bad news stories this past year.

At 17, Uber’s board would be among the largest corporate boards publicly or privately held. Compare that to some of the Valley’s largest tech companies: Apple and Facebook each have eight, while Snapchat and Twitter each have nine. Alphabet, Oracle and Intel each have 12, Microsoft has quite a few at 14 and IBM is whopping at 15 members.

Perhaps even more relevant, recent IPO candidates have had fairly small boards. Stitch Fix currently has five members, CarGurus has six and Blue Apron has eight. Looking more broadly, the median for the S&P 500 is 11, putting Uber’s 17 members far above the average for even actively traded companies, and even companies with market caps above $50 billion.

And just as a fun comparison, Uber’s board will be larger than the UN Security Council, which has 15 members, five permanent and 10 non-permanent. (One wonders which has the more difficult agenda next year.)

With all of the challenges that Uber faces, the question isn’t whether it has enough supervision, but whether a board of that size has the coherence and force to discipline the company and ensure that the constant drumbeat of scandals in the past few years can be rectified while improving the company’s long-term prospects.

You might expect the board size to be a function of the number of investors involved with Uber, which has raised about $12.5 billion according to Crunchbase. Traditionally, investors who lead funding rounds in companies get a board seat, if not more than one. Yet, Uber’s board is surprisingly devoid of active investors.

Currently, there are just three VCs on Uber’s 11-member board. That includes Benchmark partner Matt Cohler (who took over for Bill Gurley earlier this year); Yasir Al-Rumayyan, who is the managing director of Saudi Arabia’s Public Investment Fund; and David Trujillo at TPG Capital.

What’s interesting is that those VCs are equally matched by Uber founders Travis Kalanick and Garrett Camp, along with first employee and one-time CEO Ryan Graves.

Beyond those six, Uber’s new CEO Dara Khosrowshahi got a seat when he joined. Arianna Huffington joined last year, as did Wan Ling Martello, a senior exec at Nestle, who joined earlier this year as an independent director in the wake of Susan Fowler’s open letter about Uber’s culture. Finally, Kalanick appointed to the board in late September former Xerox CEO Ursula Burns and former chief of Merrill Lynch John Thain in a bid to protect his control of the company.

Now, add six new directors with the consummation of the SoftBank deal, which has been reported to include a new chairman, two directors for SoftBank and three new independent directors.

What you get is a Frankenboard of crazy proportions.

Given the high-dimensional chess that has been played by Benchmark and Kalanick over the past few months, it’s clear that neither side is ready to give up seats in a bid to bring the board size to a more manageable level. The best option is likely for the company to continue to shoot for a public debut in 2019, at which time the board can shrink as investors and others clear out their holdings and move on.

More people at the helm is not going to right the ship of Uber. What Uber needs is a unanimous board and precision focus under its new CEO in order to fix the many, many wrongs the company has committed. Seventeen is the new magic number for Uber — let’s hope the company can get everyone on the same side of the road.

More TechCrunch

Founder-market fit is one of the most crucial factors in a startup’s success, and operators (someone involved in the day-to-day operations of a startup) turned founders have an almost unfair advantage…

OpenseedVC, which backs operators in Africa and Europe starting their companies, reaches first close of $10M fund

A Singapore High Court has effectively approved Pine Labs’ request to shift its operations to India.

Pine Labs gets Singapore court approval to shift base to India

The AI Safety Institute, a U.K. body that aims to assess and address risks in AI platforms, has said it will open a second location in San Francisco. 

UK opens office in San Francisco to tackle AI risk

Companies are always looking for an edge, and searching for ways to encourage their employees to innovate. One way to do that is by running an internal hackathon around a…

Why companies are turning to internal hackathons

Featured Article

I’m rooting for Melinda French Gates to fix tech’s broken ‘brilliant jerk’ culture

Women in tech still face a shocking level of mistreatment at work. Melinda French Gates is one of the few working to change that.

19 hours ago
I’m rooting for Melinda French Gates to fix tech’s  broken ‘brilliant jerk’ culture

Blue Origin has successfully completed its NS-25 mission, resuming crewed flights for the first time in nearly two years. The mission brought six tourist crew members to the edge of…

Blue Origin successfully launches its first crewed mission since 2022

Creative Artists Agency (CAA), one of the top entertainment and sports talent agencies, is hoping to be at the forefront of AI protection services for celebrities in Hollywood. With many…

Hollywood agency CAA aims to help stars manage their own AI likenesses

Expedia says Rathi Murthy and Sreenivas Rachamadugu, respectively its CTO and senior vice president of core services product & engineering, are no longer employed at the travel booking company. In…

Expedia says two execs dismissed after ‘violation of company policy’

Welcome back to TechCrunch’s Week in Review. This week had two major events from OpenAI and Google. OpenAI’s spring update event saw the reveal of its new model, GPT-4o, which…

OpenAI and Google lay out their competing AI visions

When Jeffrey Wang posted to X asking if anyone wanted to go in on an order of fancy-but-affordable office nap pods, he didn’t expect the post to go viral.

With AI startups booming, nap pods and Silicon Valley hustle culture are back

OpenAI’s Superalignment team, responsible for developing ways to govern and steer “superintelligent” AI systems, was promised 20% of the company’s compute resources, according to a person from that team. But…

OpenAI created a team to control ‘superintelligent’ AI — then let it wither, source says

A new crop of early-stage startups — along with some recent VC investments — illustrates a niche emerging in the autonomous vehicle technology sector. Unlike the companies bringing robotaxis to…

VCs and the military are fueling self-driving startups that don’t need roads

When the founders of Sagetap, Sahil Khanna and Kevin Hughes, started working at early-stage enterprise software startups, they were surprised to find that the companies they worked at were trying…

Deal Dive: Sagetap looks to bring enterprise software sales into the 21st century

Keeping up with an industry as fast-moving as AI is a tall order. So until an AI can do it for you, here’s a handy roundup of recent stories in the world…

This Week in AI: OpenAI moves away from safety

After Apple loosened its App Store guidelines to permit game emulators, the retro game emulator Delta — an app 10 years in the making — hit the top of the…

Adobe comes after indie game emulator Delta for copying its logo

Meta is once again taking on its competitors by developing a feature that borrows concepts from others — in this case, BeReal and Snapchat. The company is developing a feature…

Meta’s latest experiment borrows from BeReal’s and Snapchat’s core ideas

Welcome to Startups Weekly! We’ve been drowning in AI news this week, with Google’s I/O setting the pace. And Elon Musk rages against the machine.

Startups Weekly: It’s the dawning of the age of AI — plus,  Musk is raging against the machine

IndieBio’s Bay Area incubator is about to debut its 15th cohort of biotech startups. We took special note of a few, which were making some major, bordering on ludicrous, claims…

IndieBio’s SF incubator lineup is making some wild biotech promises

YouTube TV has announced that its multiview feature for watching four streams at once is now available on Android phones and tablets. The Android launch comes two months after YouTube…

YouTube TV’s ‘multiview’ feature is now available on Android phones and tablets

Featured Article

Two Santa Cruz students uncover security bug that could let millions do their laundry for free

CSC ServiceWorks provides laundry machines to thousands of residential homes and universities, but the company ignored requests to fix a security bug.

3 days ago
Two Santa Cruz students uncover security bug that could let millions do their laundry for free

TechCrunch Disrupt 2024 is just around the corner, and the buzz is palpable. But what if we told you there’s a chance for you to not just attend, but also…

Harness the TechCrunch Effect: Host a Side Event at Disrupt 2024

Decks are all about telling a compelling story and Goodcarbon does a good job on that front. But there’s important information missing too.

Pitch Deck Teardown: Goodcarbon’s $5.5M seed deck

Slack is making it difficult for its customers if they want the company to stop using its data for model training.

Slack under attack over sneaky AI training policy

A Texas-based company that provides health insurance and benefit plans disclosed a data breach affecting almost 2.5 million people, some of whom had their Social Security number stolen. WebTPA said…

Healthcare company WebTPA discloses breach affecting 2.5 million people

Featured Article

Microsoft dodges UK antitrust scrutiny over its Mistral AI stake

Microsoft won’t be facing antitrust scrutiny in the U.K. over its recent investment into French AI startup Mistral AI.

3 days ago
Microsoft dodges UK antitrust scrutiny over its Mistral AI stake

Ember has partnered with HSBC in the U.K. so that the bank’s business customers can access Ember’s services from their online accounts.

Embedded finance is still trendy as accounting automation startup Ember partners with HSBC UK

Kudos uses AI to figure out consumer spending habits so it can then provide more personalized financial advice, like maximizing rewards and utilizing credit effectively.

Kudos lands $10M for an AI smart wallet that picks the best credit card for purchases

The EU’s warning comes after Microsoft failed to respond to a legally binding request for information that focused on its generative AI tools.

EU warns Microsoft it could be fined billions over missing GenAI risk info

The prospects for troubled banking-as-a-service startup Synapse have gone from bad to worse this week after a United States Trustee filed an emergency motion on Wednesday.  The trustee is asking…

A US Trustee wants troubled fintech Synapse to be liquidated via Chapter 7 bankruptcy, cites ‘gross mismanagement’

U.K.-based Seraphim Space is spinning up its 13th accelerator program, with nine participating companies working on a range of tech from propulsion to in-space manufacturing and space situational awareness. The…

Seraphim’s latest space accelerator welcomes nine companies