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Uber is seeking to join the $10 billion-plus club.
The San Francisco-based start-up, which makes a mobile application for car-service booking, is in talks to raise new financing in a round that may value it at more than $US10 billion ($10.7 billion), according to sources with knowledge of the situation. That would almost triple the company's value from $US3.5 billion last year when it garnered $US258 million.
Uber is discussing raising less than $US1 billion with new private equity investors, said one of the sources, who asked not to be identified because the information is not public. The size and value of the funding may change, the source said.
An Uber representative declined to comment.
If Uber completes a round at more than $US10 billion, it would join an exclusive group of closely held companies with 11-digit valuations. Room-sharing service Airbnb and online storage service Dropbox were valued at $US10 billion in recent fundraisings, while Palantir Technologies sought at least a $US9 billion value last year. By contrast, the median market capitalisation for technology companies in the Standard & Poor's 500 Index is about $US16 billion, according to data compiled by Bloomberg.
At more than $US10 billion, Uber would exceed the valuations of technology companies including Red Hat and Akamai, as well as retailers Best Buy and Staples.
The fervour around start-up financing has renewed debate about whether Silicon Valley is in a new bubble. While there are fewer technology IPOs today compared with the late 1990s dot-com boom, venture funding hit $US10 billion in the first quarter, the most since the second quarter of 2001, according to researcher CB Insights. Start-up financing rounds in the first quarter also hit their highest median valuation increase since 2004, according to a survey by law firm Fenwick & West.
Uber is raising new financing to boost growth and its operations, said the people with knowledge of the matter. The company recently hired Cameron Poetzscher from Goldman Sachs to head its corporate development. Poetzscher joined Uber in March and formerly was a managing director at the Wall Street's firm merger and acquisition practice in San Francisco, according to his LinkedIn profile.
Uber was founded by Travis Kalanick and Garrett Camp in 2009 after they couldn't find a cab during a trip to Paris. The company has since raised $US307.5 million from investors including Benchmark, TPG Capital and Google Ventures. The company, which rolled out its service to 115 cities globally, has 900 employees. It takes a 20 per cent commission from its drivers.
"Our vision is to build a technology company that changes transportation and logistics in urban centres around the world, and this financing gives us the fuel to make that a reality," Kalanick, Uber's chief executive, said in a blog post last year.
Uber has a high-end service for limousines and luxury cars, as well as lower-priced options. The company recently started a courier service in Manhattan, New York, that may be expanded elsewhere.
Uber and its competitors have faced numerous challenges since its founding. Rival Lyft raised $US250 million in April and expanded its car-sharing locations by two-thirds to 60 US cities. Lyft's cash hoard has enabled it to drop prices for rides, spurring a price war with Uber.
Uber is also facing regulatory hurdles around the world over safety concerns and protests by taxi drivers' lobbies. London's taxis are planning a 10,000 cab protest next month, following similar protests elsewhere in Europe.
In Australia, the Victorian government last week cracked down on the "ride-sharing" component of the Uber app by issuing $1700 fines to drivers.
The NSW government is currently mulling whether to block Uber's ride-sharing service, after the NSW taxi council last month labelled it a danger to the public.
Bloomberg with Ben Grubb