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Uber confirms new round, calls it "record breaking"

Ride-sharing company also announces deal with AT&T to pre-install app on certain devices

Financial trends and news by Steven Loeb
May 28, 2014 | Comments
Short URL: http://vator.tv/n/372f

Earlier this month, it was reported that Uber was raising a new round of funding, possibly at a valuation of $10 billion.

At ReCode's Code Conference on Wednesday, Uber CEO Travis Kalanick did confirm that, yes the company is raising a new round. While he did not reveal the exact amount that the company would be raising, Kalanick did say that it would be "record-breaking."

Kalanick also seemed to indicate that the accuracy of a report from the Wall Street Journal from earlier this, which pegged the amount of funding at $500 million, and said that the company's valuation is going to be closer to $17 billion. That number would more than quadruple its current $3.5 billion valuation.

Investors in the round are said to include General Atlantic, BlackRock and Technology Crossover Ventures.

To date, Uber has raised $307.5 million from Benchmark, Google Ventures, TPG Growth, Jeff Bezos, Crunchfund, Goldman Sachs, First Round Capital, Lowercase Capital, and more. Last August, the company raised a $258 million round. If those reports are accurate, this round would more than double its entire funding to date.

According to Business Insider, Kalanick also revealed at least some of the reasons why the company is choosing to raise the new round of funding. 

Partially it is going to be used for hiring, including political consultants. Uber, as you probably know, has run into regulatory and legal trouble in just about every city it has expanded to in the United States, most recently getting slapped with a lawsuit from 14 taxi companies in Connecticut. The company currently operates in over 150 cities around the globe and it is understandable that it would need to get some people on its side with knowledge of how to operate inside of those governments. 

But, on top of those considering, Uber simply has a lot of competition to deal with, most notably in Lyft, which is the highest funded ride-sharing company with $332.5 million, including $250 million it raised last month

While Kalanick said his company is "20 times bigger" than Lyft (by what metric he was talking about, I have no idea), he noted that Uber still needed to have "a relative cash advantage." An extra $500 million would certainly give it that, no doubt about it.

In addition to that news, Uber also announced at the Conference that the company had entered into a partnership with AT&T, which means that Uber drivers will not only use phones running on AT&T's network, but that the app will also come preloaded on an unspecified number of AT&T devices.

(Image source: neoseeker.com)


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