Uber Continues to Raise Tons of Money

Josh WolfordBusiness

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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.

Josh Wolford
Josh Wolford is a writer for WebProNews. He likes beer, Japanese food, and movies that make him feel weird afterward. Mostly beer. Follow him on Twitter: @joshgwolf Instagram: @joshgwolf Google+: Joshua Wolford StumbleUpon: joshgwolf