Picking a chief financial officer is crucial for Uber because the company has said it plans to go public by the end of 2019
SAN FRANCISCO — After a year’s long search, Uber has finally found a chief financial officer as it advances toward an initial public offering.
The ride-hailing company said Tuesday that it had hired Nelson J. Chai, 53, a former executive at Merrill Lynch and CIT Group, to be its new chief financial officer. The appointment fills a prominent void in Uber’s executive suite: The job had been vacant since Brent Callinicos departed in 2015.
Picking a chief financial officer is crucial for Uber because the company has said it plans to go public by the end of 2019, in what is likely to be one of the biggest-ever technology IPOs. Uber is already one of the most highly valued private companies in the world, at $62 billion. Wall Street typically likes to see experienced finance executives helping to helm companies that are going public.
Yet Uber’s financial picture may deter some investors. While the transportation colossus is growing quickly, it has been highly unprofitable and has burned through money. Last week, Uber posted a loss of $891 million for the second quarter, which was slightly narrower than a year earlier.
Dara Khosrowshahi, who joined Uber as chief executive last year, has been shedding some of the company’s money-losing businesses and is trying to clean up its once toxic workplace culture, in order to get ready for an IPO. Khosrowshahi has appointed several executives in recent months, including a chief operating officer, Barney Harford. In a statement, Khosrowshahi said of Chai, “He will be a great partner for me and the entire management team as we move towards becoming a public company.”
In an interview on Monday, Chai said John A. Thain, an Uber board member and a former chief executive of Merrill Lynch and CIT Group, had endorsed him as a candidate for the chief financial officer role. Chai said they had worked together at Merrill Lynch, CIT Group and the New York Stock Exchange.
He added that Thain did not have to give him a hard sell on joining Uber. “He didn’t make the pitch to me at all, truthfully,” Chai said. “He knows me, and he knows I like challenges.”
He said he and Khosrowshahi met over a breakfast of over-medium eggs and oatmeal in June. “I liked him a lot,” Chai said. “We had a very good, candid dialogue about where the company was and where it was headed.”
Chai was most recently the chief executive of Warranty Group, a Chicago-based insurance provider, which was sold to Assurant for $2.5 billion in October. Warranty Group was a portfolio company of TPG Capital. TPG is also a major investor in Uber and has a seat on the company’s board.
Chai said he wanted to move into the tech industry because of its growth.
“You get to a point where you want to learn new things,” he said. “It was attractive to me to move away from financial services and join a technology company.”
Chai said he has overseen other initial public offerings, including that of the digital trading firm Archipelago in 2004. A year later, he was involved in the merger of Archipelago with the New York Stock Exchange; the New York Stock Exchange became a public company as part of that deal.
Chai said he would not be able to say whether Uber was on track for its IPO until he settled into his role next month.
“The more important thing as we take the company public is better explaining the path towards profitability,” he said. “When that time comes, I am confident we will be able to let people understand the path that the company is on.”[“Source-economictimes”]