Uber has suffered one bad headline after the other over the course of the year, amid a workplace culture investigation, the departure of top executives and a high-profile lawsuit from Google. Famous investor Bill Gurley had been key in guiding Kalanick through these situations.
Then Benchmark’s Matt Cohler and Benchmark’s Peter Fenton presented Kalanick with a list of investor demands earlier this summer, including his resignation by the end of the day, according to The New York Times. Kalanick ultimately stepped down from his operational role, but as a shareholder, he remained on the board.
But the drama did not end there. Benchmark filed a legal complaint against Kalanick this week, alleging that Kalanick made “material misstatements” and hid crucial information about company problems.
Prolific Japanese investor SoftBank has said it’s mulling an investment in Snap, a stake Bloomberg suggested could be purchased from Benchmark, although those discussions were not confirmed by CNBC. Benchmark tweeted earlier this month that it was “incredibly optimistic” about Uber’s future, and had “immense confidence” in Uber’s employee and the “right new CEO.”
Benchmark has been one of Uber’s oldest supporters: In February 2011, it poured $11 million into the company at a $60 million valuation, according to Crunchbase data.
Here’s the full text of the letter.
“As a group of shareholders of Uber Technologies, Inc. (the “Company”) we were surprised and distressed to learn through the media of the lawsuit brought by your firm against the Company, and its founder and former Chief Executive Officer Travis Kalanick.
Naturally, we share your concerns about the problems that the Company has confronted in recent months, but we are greatly concerned about the tactics employed by Benchmark to address them, which strike us as ethically dubious and, critically, value-destructive rather than value enhancing.
Specifically, we do not feel it was either prudent or necessary from the standpoint of shareholder value, to hold the company hostage to a public relations disaster by demanding Mr. Kalanick’s resignation, along with other concessions, on a few hours’ notice and within weeks of a personal tragedy, under threat of public scandal. Even less so your escalation of this fratricidal course – notwithstanding Mr. Kalanick’s resignation – through your recent lawsuit, which we fear will cost the company public goodwill, interfere with fundraising and impede the critical search for a new, world-class Chief Executive Officer. Benchmark has used false allegations from lawsuits like Waymo as a matter of fact and this and many actions has crossed the fiduciary line.
Benchmark’s investment of $27M is worth $8.4 billion today and you are suing the founder, the company and the employees who worked so hard to create such unprecedented value. We ask you to please consider the lives of these employees and allow them to continue to grow this company in peace and make it thrive. These actions do the opposite.
Accordingly, we would request that Benchmark help the Company realize its full potential by allowing the necessary work to be done in the Board Room rather than the Courtroom. To this end, at this point, in light of your suit against the Company, we believe it would be best, and hereby request, that Benchmark remove its representative from the Company’s Board and move promptly to divest itself of enough shares in the Company so as to cease to have Board appointment rights. We have investors ready to acquire these shares as soon as we receive communication from Benchmark that they are willing to withdraw their lawsuit and sell a minimum of 75% of their holdings.
We are also asking for a symbolic Board of Directors vote on this matter at today’s Board meeting to show how the Board of Directors stands on this lawsuit brought against the company, its founder and the 15,000 employees of Uber who have all worked so hard in concert to create the fastest growing company in history.
Many other shareholders share our views and will be adding their names in the days ahead. Any shareholders who want to join this letter and petition may email one of our signatories of this letter so that we can submit a final list of shareholders who support this request.”
CNBC reached out to the investors for comment. Uber declined to comment.
— With reporting by CNBC’s Lora Kolodny