Someone just gave Uber a bunch of money, again.
Bloomberg reports that the on-demand car company has just raised $1.6 billion in convertible debt from Goldman Sachs' wealth management clients.
Bloomberg has the specifics on the deal:
The bond Uber placed with Goldman Sachs’ private clients is a six-year bond that will convert into equity at a 20 percent to 30 percent discount to Uber’s valuation at the time of an initial public offering, people familiar with the situation told Bloomberg News last month.
The convertible bond carries a coupon that increases over time if Uber hasn’t gone public within 4 years, the same people have said.
Why wouldn't these investors want to get it now?
Barely more than a month ago, Uber raised $1.2 billion – and the company is apparently in talks to add another $600 million to that. This funding round valued the company at over $40 billion.
Uber is in the process of playing Hungry Hungry Hippos with market share – so cash is needed. It's looking to expand into more cities all across the world – if it can clear the legal hurdles. The sources who reported this new round of funding suggest that's what it'll be used for, along with R&D and "improving safety".
Uber just slashed fares in 48 cities across the US, a move that hurts the company's bottom line, but helps them grab more of the market from competitors like Lyft. Uber's playing the long game, and it's currently working.