Uber to raise $2.1bn at $62.5bn valuation
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. Uber is spending aggressively to expand throughout Asia, particularly in China, where the company expects to spend $1billion, according to a June letter to investors from chief executive officer Travis Kalanick.
As part of the current financing round, Uber has closed investments from Tiger Global Management and 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 US, 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. The three Asian companies, along with Lyft in the US, are teaming up to form a global alliance that will make their apps cross-compatible for travellers, they said in a statement on Thursday.
Lyft, Uber’s biggest US 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’s 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 $1billion.
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 US gross revenue about 200% this year. It is profitable in more than 80 cities around the world, people familiar with the matter said. BLOOMBERG