Uber Technologies is looking to raise as much as $2.1-billion (U.S.) in a financing round that would value the car-booking company at $62.5-billion, according to people familiar with the matter.SERGIO PEREZ/Reuters
Uber Technologies is looking to raise as much as $2.1-billion (U.S.) in a financing round that would value the car-booking company at $62.5-billion, said people familiar with the matter. Uber has filed paperwork in Delaware detailing the fundraising plans, said the people, who asked not to be named because the plans are private.
The new funding shows Uber is accelerating its race to expand globally and branch into services beyond picking up and dropping off riders.
The company has tested food and package delivery in some cities and is working on new technology, such as self-driving cars.
As part of the financing round, Uber has closed investments from hedge fund Tiger Global Management and investment manager T. Rowe Price, and it's also seeking strategic investors with shared business interests, the people said. Uber, Tiger Global and T. Rowe Price declined to comment. One strategic investor, Microsoft, kicked in about $100-million as part of a previous round for the San Francisco ride-hailing company, people with knowledge of the matter said in July.
Tiger Global backs some of Uber's main competitors outside of the U.S., including China's Didi Kuaidi, India's Ola and Singapore's GrabTaxi. Didi Kuaidi raised about $3-billion in a round this year, people familiar with the matter had said.
Lyft, Uber's biggest U.S. rival, is currently seeking to raise $500-million, according to fundraising documents obtained by Bloomberg last month. The materials also contain details about the company's finances that suggest it is spending aggressively to continue growing. The company lost $127-million in the first half of 2015 on $46.7-million in revenue, according to the documents. Lyft said last month that it has gained market share in key markets, such as San Francisco, and has a gross revenue "run rate" of $1-billion.
For Uber's current round, the company is telling investors it has a gross revenue run rate of more than $10-billion globally, people familiar with the matter said. The number is typically calculated by annualizing a recent week, month or quarter of the company's gross revenue, which means actual annual revenue may differ substantially. The number doesn't reflect expenses, and it includes money paid out to drivers, who take most of that revenue. Uber has increased actual U.S. gross revenue about 200 per cent this year, the people said.
Uber, which launched its service more than five years ago, had already raised more than $10-billion before the current round. While most of that money has come in exchange for equity, the closely held company took on at least $1-billion in debt, part of a round led by Goldman Sachs's private wealth arm. Uber is profitable in more than 80 cities around the world, and the number of U.S. trips completed this year has increased 250 per cent compared with the same period last year, people familiar with the matter said.