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Uber Continues to Raise Tons of Money

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. B...
Uber Continues to Raise Tons of Money
Written by Josh Wolford
  • 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.

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