Uber Technologies Inc. has hired a chief financial officer, filling a long-standing vacancy and clearing the way for a much-anticipated initial public offering next year, Reuters reports.
The ride services company said it has hired Nelson Chai, a financial services veteran with deep connections to the banks and deal-makers Uber must impress ahead of what is expected to be a large, complicated IPO.
Uber lost more than US$1 billion per quarter in three of the last six quarters. Still, it hopes its growth potential will attract investors.
It must meet its self-imposed deadline of an IPO next year or a shareholder provision that would lift transfer restrictions on shares could create a chaotic market of buying and selling Uber stock.
The CFO position has been empty since 2015, when Brent Callinicos departed. Previous Uber chief executive Travis Kalanick had shown little interest in hiring a replacement, but the search stepped up last year under new CEO Dara Khosrowshahi.
Uber’s most senior finance executive, Prabir Adarkar, left last month to become CFO at meal-delivery service DoorDash, further depleting the department.
The lack of a CFO, and the protracted search for one, had worried investors. Operating without such a senior manager is rare for a company the size of Uber, whose net revenue, after payment for drivers, promotions and refunds, was US$2.8 billion in the second quarter this year. A CFO is also vital for conducting an initial public offering.
“I know people at the major investment banks,” Chai, 53, said in an interview. “After the announcement [from Uber] goes out I expect to become a lot more popular with people from my past.”
Chai has had stints at Merrill Lynch, where he worked as CFO through the financial crisis, and Bank of America after it bought Merrill Lynch in 2008. He was also president of commercial lending bank CIT Group.
Most recently, he was president and CEO of insurance provider The Warranty Group, placed there by private equity firm TPG to improve the company’s performance. His relationship with TPG, an Uber investor and board member, and especially John Thain, another Uber board member who ran CIT Group, Merrill Lynch and the New York Stock Exchange, led him to Uber.
Chai said he had breakfast with Khosrowshahi in June, his introduction to the job and the man he would work for.
“He will be a great partner for me and the entire management team as we move toward becoming a public company,” Khosrowshahi said.
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