Uber’s phenomenal funding continues, but trouble follows in South Korea

22 Jan 2015

Venture capitalist Shervin Pishevar has the Uber logo shaved into his head at LeWeb London 2012. Photo by Kmeron for LeWeb12 Conference via Flickr

Sources claim that Uber, the most highly venture-backed start-up, has raised a further US$1.6bn in convertible debt and is in talks to secure US$600m more.

Bloomberg cites “people with knowledge of the matter” who say that the company behind the drivers-for-hire app raised US$1.6bn in convertible debt from Goldman Sachs’ wealth management clients. Uber is also reportedly raising US$600m from hedge funds and international investors.

All of this comes in addition to US$1.2bn raised by Uber just last month from hedge funds and investors, which gave the company a US$40bn valuation. At the time, it was reported that Uber was working with Goldman Sachs to sell a further US$1bn in debt to wealthy Wall Street clients.

Since its founding in 2009, Uber has raised more than US$4bn in equity and debt funding. This makes it top of the charts in terms of start-up funding, towering over social network Facebook (the previous record holder), which raised US$2.2bn before its IPO.

Uber is said to be stocking its war chest in preparation for further global expansion, though much of its funding may need to be earmarked for legal expenses as yet another region is set to bring charges against the car-booking service.

Uber woes could cost millions of won

In South Korea, AFP reports that the Korea Communications Commission (KCC) issued a statement saying Uber violated laws in South Korea by failing to report its web-based location service to the regulator.

This infraction could land Uber a fine of 30m South Korean won (about €24,000) or a three-year prison term, according to the KCC, and a formal complaint will be filed with prosecutors this week.

It is the latest in Uber’s legal problems in South Korea (and, indeed, across numerous locations around the world), as last month the start-up’s CEO Travis Kalanick was indicted for conducting business without a licence to do so.

Elaine Burke is the editor of Silicon Republic