Liz Gannes

Recent Posts by Liz Gannes

Fast Car: Uber Funding Auction Could Reach a $3.5B Valuation

Uber, the ride-logistics startup, could be valued at up to $3.5 billion in a new funding round led by TPG Capital, said multiple sources close to the discussions, which are ongoing but advanced. We had first reported that Uber was seeking the round in June.

In the past few days, we’ve heard a continuous stream of rumors and reports about the funding auction for the high-profile startup, with uber-high valuations floated. That seems to be the case for the deal as it is now conceived, as the amount that Uber is valued at has risen over the last month.

Still, no deal is done as yet, said sources, warning that any terms could change.

In recent weeks, Uber CEO Travis Kalanick hasn’t been particularly discreet about his company’s fundraising efforts, which sources said could bring the company more than $100 million in investment funds for use in expansion of its offerings.

Sources said that TPG, the large private equity firm, is aware of the perception of such a lofty valuation and has been endeavoring to negotiate more favorable terms for its investment.

A year and a half ago, Uber raised $37.5 million in 2011 from investors including Menlo Ventures, Benchmark Capital and Goldman Sachs. At the time, the company was valued at $330 million.

The ensuing months have been fruitful. Sources said Uber is now on track to bring in about $125 million in total revenue this year, much higher than had been projected, and that number is growing quickly.

In addition to TPG, Google Ventures could also be one of its new investors, sources said.

It must be noted that, when asked a direct question at the Fortune Brainstorm conference in Aspen this week about new Uber funding at a $2.5 billion valuation that Airbnb reportedly has, Kalanick appeared to deny the higher price, but was also not specific.

“So, the party line is that we are not commenting on fundraising discussions we may or may not be having,” said Kalanick, who often playfully parses his words. “You know, there are probably one or two folks we’re talking to who we’ve signed NDAs with who are particularly loose with information, but that information is not correct.”

Reached for comment late Wednesday, an Uber representative referred us back to Kalanick’s onstage remarks, but declined to elaborate or answer further questions.

Uber now operates in 35 cities around the world, and Kalanick told us less than a month ago that revenue is growing 18 percent each month. The company now has some 320 employees, and said Wednesday that it would launch its service in Silicon Valley. In recent months, Uber hired CTO Thuan Pham, formerly of VMware, and set up international operations in the Netherlands.

After starting as a limo-hailing service and expanding to all sorts of vehicles, Uber has also extended into new areas beyond moving people around — such as stunts to deliver ice cream. “We like to think of Uber as the cross between lifestyle and logistics, where lifestyle is what you want and logistics is how you get it there,” Kalanick has said.

Other car services have also raised money recently. Lyft recently raised $60 million, bringing its total to $83 million.

Another peer-to-peer ride-sharing service, Sidecar, raised $10 million from Lightspeed Venture Partners and Google Ventures.

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— Gitesh Pandya of comments on the dreadful opening weekend box office numbers for “The Fifth Estate.”