Uber Closes a $1.6 Billion Financing

Uber, the popular ride-hailing startup, has closed a $1.6 billion (roughly Rs. 9,845 crores) in financing from clients of Goldman Sachs' private wealth arm, the investment bank confirmed Wednesday.

The new round of financing comes just months after the company raised $1.2 billion (roughly Rs. 7,383 crores) from big institutions. Including that investment, the company is now valued at some $41.2 billion (roughly Rs. 2,53,512 crores), one of the richest-ever valuations for a private startup.

Moreover, Uber may still raise an additional $600 million (roughly Rs. 3,691 crores) in stock from hedge funds and strategic overseas investors, according to two people briefed on the matter, who spoke on condition of anonymity because the talks are still ongoing.

Representatives from Uber declined to comment.

The funding adds Uber's already overflowing war chest; to date, the company has raised upward of $4 billion (roughly Rs. 24,612 crores).

With the new cash, Uber now has more incentive to take on a new life as a publicly traded company. The securities sold to Goldman's clients - in what was one of the biggest-ever sales of convertible debt - can be converted into shares in the startup once it begins trading on a stock exchange, at a discount of between 20 percent and 30 percent of the price set in an initial public offering, people briefed on the matter have said.

Should the company not stage an IPO within four years, however, the interest rate on those securities will rise.

But the new capital also comes as Uber is poised to enter new, competitive transportation markets around the globe.

Travis Kalanick, Uber's chief executive, said in December that Uber planned to make substantial investments in the Asia Pacific region, where the company faces competition from incumbents such as GrabTaxi, a ride-hailing startup backed by SoftBank Corp.

Uber also has its sights set on Europe, another lucrative market, where the company has long fought with rival transportation operators like Hailo, which offers a similar service. On Sunday, Kalanick said that Uber wants to better cooperate with European officials, many of which his company has clashed with in the past.

News of the financing was reported earlier by Bloomberg News.

© 2015 New York Times News Service