SAN FRANCISCO (Reuters) – Uber Technologies Inc [UBER.UL] has employed a finance director, says the tour company Tuesday, filling a vacant job vacancy and clearing the way for an expected first public offer next year.
PHOTO PHOTO: A Uber logo is seen on a car while the car is driving through Times Square in New York City, New York, USA, July 27, 201
Uber said it had hired Nelson Chai, a financial service veteran with deep connections to the banks and deal makers Uber must impress ahead what is expected to be a major, complicated IPO. Uber lost more than $ 1 billion a quarter in three of the last six quarters. Nevertheless, it hopes that growth potential will attract investors.
Uber has to fulfill its self-imposed deadline for a stock exchange next year, or a shareholder clause that will lift transfer restrictions on shares can create a chaotic market for the purchase and sale of Uber shares.
The CFO position has been empty since 2015, when Brent Callinicos left. Former Uber Chief Executive Officer Travis Kalanick had shown little interest in hiring a replacement, but the search went up last year under new CEO Dara Khosrowshahi.
Ubers senior finance director, Prabir Adarkar, left last month to become CFO at the food supplier DoorDash, which further unloads the department.
Ubers lack of financial director, and the long-term quest for one, had worried investors. Operating without such a leader is rare for a company of Uber, whose net income, after payment for drivers, promotions and refunds, was $ 2.8 billion in the second quarter of this year. A CFO is also important for conducting an initial public offering.
"I know people of the big investment banks," said Chai, 53, in an interview. "After the announcement (from Uber) expires, I expect to become much more popular with people from my past."
Chai has had stints on Merrill Lynch, where he worked as CFO during the financial crisis, and Bank of America ( BAC.N ) after he bought Merrill Lynch in 2008. He was also president of commercial lending bank CIT Group ( CIT.N ).
Earlier, he worked as CFO at Archipelago Holdings and helped to take the online stock exchange in 2004. It was later purchased by the New York Stock Exchange, where Chai worked as CFO until 2007.
Last, he was president and Managing Director of the insurance company The Warranty Group, located there by private equity firm TPG to improve the company's performance. His relationship with TPG, a Uber investor and board member, and especially John Thain, another Uber board member who drove the CIT Group, Merrill Lynch and the New York Stock Exchange, led him to Uber.
Chai said the breakfast with Khosrowshahi in June, his introduction to the job and the man he wanted to work for.
He wants to be a good partner for me and the whole management when we move towards becoming a public company, Khosrowshahi said.
Uber chose Chai after offering VMware ( VMW.N ) CFO Zane Rowe this past spring. Rowe hit it down under pressure from his board, according to people familiar with the case.
Chai acknowledged Uber must work to convince the public market investors that it can continue to grow and has a road to profitability after losing more than 4 billion dollars last year. Revenue for the second quarter was up 8 percent during the first quarter and more than 60 percent from last year.
Potential investors will challenge him to explain the business area of Uber, which has fluctuated between investing and disposing of products, strategies and geographical areas.
This year, Uber sold its businesses in Russia and Southeast Asia while promising to invest heavily in India. It scrapped its autonomous trucking efforts while doubling down on its freight business. It bought an electric bike company and is eyeing a scooter service, but retrenched from its self-image car aspirations.
"The biggest part is going to talk through some of the strategic choices the company has made to invest in and shareholders," said Chai.
Uber had a number of senior positions to fill since Kalanick pulled out, and not everyone has gone well. Chief Operating Officer Barney Harford, picked by Khosrowshahi, has been accused of making quick insensitive comments, resulting in an internal probe.
Chai is based in New York City and said he is currently looking for an apartment in San Francisco and starting work next month.
Reporting by Heather Somerville; Editing David Gregorio