Uber Discusses Investment at $12 Billion Valuation Drivers-for-Hire App Firm Seeking $500 Million Investment
Uber Inc. is hailing a group of fund managers for a large investment that could value the startup at north of $12 billion, according to people familiar with the matter.
The five-year-old company, whose mobile app connects people with drivers for hire, is talking this week to several firms to raise near or above $500 million in funding, these people said. Possible investors include mutual fund BlackRock Inc., BLK +0.22% private-equity firms General Atlantic and Technology Crossover Ventures, and hedge funds, the people said.
Prospective investors are expected to formally express their interest by the end of this week. The company is aiming to close a deal in the next few weeks or by the end of the second quarter, at the latest, these people said. The people also cautioned a deal isn't assured.
Bloomberg earlier reported that Uber is seeking to raise financing at more than $10 billion.
Uber is already one of the world's most valuable venture-backed startups. But a valuation of more than $12 billion would put it in an elite club.
Three tech startups—home-rental site Airbnb Inc., file-storage service Dropbox Inc., and Chinese handset maker Xiaomi Inc.—were each valued at $10 billion by investors in the past year. The funding round could also value Uber higher than two of the largest publicly traded car-rental companies. Hertz Global Holdings Inc. HTZ +1.33% has a market value of about $12.8 billion and Avis Budget Group Inc. CAR +0.87% is valued at $5.8 billion.
Unlike those companies, which manage expensive fleets of vehicles and hundreds of rental offices, Uber simply maintains a network of riders and drivers, much like OpenTable Inc. OPEN -0.08% operates a reservation system for diners and restaurants.
According to people briefed on Uber's financials, the company is projected to make as much as $1.5 billion in net revenue in 2015.