Uber Technologies Inc. threw down the gauntlet in the on-demand transportation wars Friday, announcing that it had secured $1.2 billion in additional funding, which valued the 4-year-old company at $17 billion. It turned to longtime counsel Fenwick & West for legal advice on the raise, which catapulted Uber to one of the highest valuations ever reached for a venture-backed business.
“The company has evolved from being a scrappy Silicon Valley tech startup to being a way of life for millions of people in cities around the world,” cofounder and CEO Travis Kalanick wrote in a post on Uber’s corporate blog.
Uber reportedly began courting extra cash following news that Airbnb Inc., another leader in the sharing economy space, closed a $500 million round that valued the lodging-booking company at $10 billion. In April, Uber’s ride-share rival, Lyft Inc., secured $250 million in a Series D round, which put it in step with the money Uber had raised.
It was only a year ago that Uber made waves for what was then viewed as a massive raise: $361.2 million at a quarter of today’s valuation. Fenwick also advised on that transaction.
Investors include mutual fund managers Fidelity Investments, Wellington Management and BlackRock, as well as VC firms Summit Partners and Kleiner Perkins Caufield & Byers. Previous Uber investors such as Menlo Ventures and Google Ventures also participated.
“I think a lot of folks feel like Uber was a company they missed out on,” Kalanick told Bloomberg BusinessWeek, referring to Uber’s ability to attract new backers this time around. “Sequoia passed on us three times. Yuri [Milner, from Russian VC firm DST] passed on us three times.”
The company, which has 900 employees and takes a 20 percent commission from its drivers, operates in nearly 130 cities and 40 countries. It has also begun investigating diversification plays such as logistics. About a month ago, it launched a courier service in Manhattan, which Kalanick said didn’t factor into the funds raised. In an interview with The Wall Street Journal, he said the business was “at least doubling every six months.”
Uber has come under fire over the past year for controversial competitive tactics. And as Lyft and Uber duke it out to lure drivers to their platforms, Kalanick raised eyebrows at a public appearance last week when he said Uber’s future is in self-driving cars. Recently filed lawsuits accuse the company of skimming driver tips and not properly classifying drivers as employees. The company is also battling on the regulatory front as it seeks to enter new cities. But these challenges evidently did not deter investors.
The Fenwick team was led by corporate partners Gordon Davidson and Michael Brown and included corporate associates Jay Wedge and Jordan Roberts.
Contact the reporter at email@example.com.