Car-booking app Uber has confirmed it has raised US$1.2bn in fresh investment, which now values the most highly venture-backed start-up at US$40bn. Not bad for what is technically still a start-up.
New investors in the start-up – the company was founded in 2009 – include Middle East sovereign wealth fund Qatar Investment Authority as well as two hedge funds Valiant Capital Partners and Lone Pine Capital.
New Enterprise Associates, one of the world’s oldest and largest venture capital players, is also understood to have contributed to the round.
The cash horde being built by Uber signals the company is preparing itself for an IPO. The company is already working with Goldman Sachs to sell a further US$1bn in debt to wealthy Wall Street clients.
The Uber economy – 1m jobs and Asia is just around the corner
“2014 has been a year of tremendous growth for Uber,” wrote Uber CEO Travis Kalanick in the Uber Ride Ahead blog.
“It was just a year ago that Uber was operating in 60 cities and 21 countries – today we are in over 250 cities in 50 countries. We are six times bigger today than 12 months ago – and grew faster this year than last. This progress is remarkable, but it is in the coming years that Uber truly scales and the impact in cities becomes visible.
“In 2015 alone, Uber will generate over 1m jobs in cities around the world and with that millions of people may decide that they no longer need to own a car because using Uber will be cheaper than owning one. Parking could become less strained in our biggest cities, and city congestion may actually start to ease due to uberPOOL’s expansion and success.
“This kind of continued growth requires investment. To that end, we have just raised a financing round of $1.2 billion, with additional capacity remaining for strategic investments. This financing will allow Uber to make substantial investments, particularly in the Asia Pacific region,” Kalanick said.
The US$40bn value puts Uber at 1.5 times the capitalisation of Twitter and give it the same capitalisation of Salesforce.com, Delta Airlines and Kraft Foods.
The company’s value has effectively quadrupled in just one year. It left the elite US$10bn valuation club occupied by Airbnb and Dropbox when a US$1.2bn financing round in June gave Uber a record high valuation of US$17bn for a start-up app that is only a few years old.
Culture change coming at Uber
However, it has been a bumpy road for Uber of late. Uber has faced criticism for claiming that smear campaigns against critical journalists is the way forward. Uber has also faced criticism for its hiring policies and sexist marketing campaigns in some parts of the world.
Kalanick acknowledged that change is needed.
“This kind of growth has also come with significant growing pains,” he said.
“The events of the recent weeks have shown us that we also need to invest in internal growth and change. Acknowledging mistakes and learning from them are the first steps. We are collaborating across the company and seeking counsel from those who have gone through similar challenges to allow us to refine and change where needed.
“Fortunately, taking swift action is where Uber shines, and we will be making changes in the months ahead.
“Done right, it will lead to a smarter and more humble company that sets new standards in data privacy, gives back more to the cities we serve and defines and refines our company culture effectively,” Kalanick promised.
Uber image via Shutterstock