The company will the money to expand its platform into Japan and BrazilRead more...
It was only five months ago that the company raised $1.2 billion at a $17B valuation!
The company is now looking to raise yet another $1 billion in funding, according to a report out of the Financial Times on Friday. The previous round valued the company at $17 billion, which had already made it "the highest-valued private company in Silicon Valley."
This new round would obviously drive that even higher, maybe even as high as $25 billion, according to ReCode.
Prior to these mega-rounds, Uber had 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.
It's total funding raised now stands at roughly $1.5 billion.
There are three likely uses for the funding. First is expansion, which Uber has been pretty aggressive with lately, particularly in Asia. Last year it expanded to Singapore, South Korea, Taipei, Dubai, Shanghai andBangalore. In April of this year came the big one: the company began rolling out its services in Beijing.
It will also help Uber fend off competition from its biggest rivals, most notably Lyft. The two companies have recently been at each other's throats, with accusations of shady practices and the theft of internal documents.
Uber has even suggested that Lyft investors have been pushing Uber to buy the company, something that Lyft has denied. I doubt it would ever really happen, but it would be fascinating if that is what Uber used its $1 billion on, wouldn't it?
The third, and most likely, answer for why Uber needed more money so quickly is for defending itself from regulators and local taxi services. The company has run into regulatory hurdles in virtually every city to which it’s expanded, and there has been a string of incidents that have called the service’s safety into question.
In August the company hired David Plouffe, who was Barack Obama's campaign manager in 2008, as its new Senior Vice President of Policy and Strategy.
Plouffe's job is to manage all global policy and political activities, communications, and Uber branding efforts. He is, essentially, supposed to build up Uber's brand in the same way he did for Obama, to get out ahead of the taxi industry, and to get both customer and regulators on Uber's side.
"Uber has the chance to be a once in a decade if not a once in a generation company. Of course, that poses a threat to some, and I’ve watched as the taxi industry cartel has tried to stand in the way of technology and big change. Ultimately, that approach is unwinnable," Plouffe wrote at the time.
"But I look forward to doing what I can right now to ensure drivers and riders are not denied their opportunity for choice in transportation due to those who want to maintain a monopoly and play the inside game to deny opportunity to those on the outside."
Another $1 billion would certainly help the company fend off more of these attacks.
At the same time, Uber raising yet so much money, at such an unbelievably high valuation, will make the heads of those who already thought it was overvalued explode.
One of those who has publicly come out and said just that is Lyft investor Peter Thiel, who told CNBC in September that Uber is overvalued, while Airbnb, another company that Thiel has invested in, is undervalued, but only because the latter does not conform to the habits of people in Silicon Valley.
"Investors are always biased to invest in things they themselves understand. So venture capitalists like Uber because they like driving in black town cars," he said. "They don't like Airbnb because they like staying in five-star hotels, not sleeping on people's couches."
(Note: Thiel will be a keynote speaker at Vator's inaugural “Post-Seed” Conference on December 2nd. The discussions will revolve around how venture capital is changing, due to a landscape being altered by new financing options, including crowdfunding and debt financing. Get your tickets here!)
VatorNews has reached out to Uber for confirmation of the story. We will update if we learn more.
(Image source: video.foxbusiness.com)
Support VatorNews by Donating
Read more from our "Trends and news" series
A total of 119 billion pounds of food, or 40% of all food in the US, goes to waste every yearRead more...
The company works with employers to provide care to their employeesRead more...
Related Companies, Investors, and Entrepreneurs
Joined Vator on
Uber is a ridesharing service headquartered in San Francisco, United States, which operates in multiple international cities. The company uses a smartphone application to arrange rides between riders and drivers.