Uber snags $1.2 billion in new funding; seen valued at $18 billion

SAN FRANCISCO Fri Jun 6, 2014 7:13pm EDT

An Uber app is seen on an iPhone in Beverly Hills, California, December 19, 2013. Uber has entered more than 60 markets, ranging from its hometown of San Francisco to Berlin to Tokyo. Leaked financials in December indicate that the company, which began connecting passengers with drivers of vehicles for hire about 3-1/2 years ago, is generating $200 million a year in revenue beyond what it pays to drivers. Photo taken December 19, 2013.  REUTERS/Lucy Nicholson (UNITED STATES - Tags: BUSINESS TRANSPORT) - RTX1705H

An Uber app is seen on an iPhone in Beverly Hills, California, December 19, 2013. Uber has entered more than 60 markets, ranging from its hometown of San Francisco to Berlin to Tokyo. Leaked financials in December indicate that the company, which began connecting passengers with drivers of vehicles for hire about 3-1/2 years ago, is generating $200 million a year in revenue beyond what it pays to drivers. Photo taken December 19, 2013.

Credit: Reuters/Lucy Nicholson (UNITED STATES - Tags: BUSINESS TRANSPORT) - RTX1705H

Related Topics

SAN FRANCISCO (Reuters) - Uber Inc has raised $1.2 billion from mutual funds and other investors in a funding round valuing the fast-growing rides-on-demand service at $18.2 billion, one of the highest valuations ever for a Silicon Valley startup.

Uber Chief Executive Officer Travis Kalanick announced the funding round on Uber's blog Friday.

The funding, eclipsed only by the likes of Facebook Inc before it went public, is a vote of confidence by investors in four-year-old Uber's growth potential.

"Uber is one of the most rapidly growing companies ever, and we believe there are opportunities for continued tremendous growth," Joan Miller, a spokeswoman for Summit Partners, an investor in the funding round, said by telephone.

Investors hope the company, which allows users to summon a ride on their smartphones, can expand globally and diversify into logistics.

The investors in the round valued Uber "pre-money" at $17 billion, the blog post said. The $1.2 billion infusion took the startup's valuation to $18.2 billion.

Fidelity Investments put in about $425 million, Wellington Management added $209 million and BlackRock Inc contributed $175 million, according to a person familiar with the matter.

Venture firms Summit Partners, Kleiner Perkins Caufield & Byers, Google Ventures and Menlo Ventures also participated in the round, a person familiar with the matter said.

Kleiner's investment came from its Digital Growth Fund, run by former stock analyst Mary Meeker, known for her bullish recommendations during the first dot-com boom. Her fund has had recent hits, including traffic app Waze, acquired last year for $1.1 billion by Google.

Uber, which did not give details about its latest investors, operates in 128 cities across 37 countries.

Kalanick said he expected to close a second round of funding from strategic investors of about $200 million.

Uber originally started with a luxury town-car service, but in many cities has since added UberX, a low-frills service with nonprofessional drivers using personal cars.

Competitors to Uber include Flywheel and Hailo, which connect passengers and taxis; and Lyft and Sidecar, which link passengers and drivers who use their personal vehicles.

While Uber has grown rapidly since its 2010 launch in San Francisco, it has run into serious regulatory issues. Ordinances keep it out of cities such as Las Vegas, Miami and Vancouver, British Canada.

In some places, including Chicago, San Francisco and Washington, D.C., Uber and similar companies face lawsuits from taxi companies hoping to keep the new competition out.

In Colorado, Governor John Hickenlooper signed a bill on Thursday that legalized drive-for-hire services in consumers' own vehicles, including UberX.

In California, ridesharing is currently regulated through the state's Public Utilities Commission, although taxi drivers and Uber itself are challenging that authority.

Uber sometimes offers promotional deliveries, such as roses around Valentine's Day or Christmas trees. Earlier this year, it launched a regular courier delivery service for small packages in Manhattan.

(Editing by David Gregorio, Jeffrey Benkoe and Jonathan Oatis)

FILED UNDER:
We welcome comments that advance the story through relevant opinion, anecdotes, links and data. If you see a comment that you believe is irrelevant or inappropriate, you can flag it to our editors by using the report abuse links. Views expressed in the comments do not represent those of Reuters. For more information on our comment policy, see http://blogs.reuters.com/fulldisclosure/2010/09/27/toward-a-more-thoughtful-conversation-on-stories/
Comments (1)
OuterLimits wrote:
It’s difficult to understand how a State can require hundreds of thousands for a taxi driver’s license yet allow Uber to end run that.

Jun 08, 2014 4:02am EDT  --  Report as abuse
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.