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Google's Uber could see $40 billion valuation in funding round: reports

27 November 2014

After a new financing round, Google-promoted Uber Technologies Inc could see its value rise to $40 billion, making the mobile car-booking company more valuable than three-quarters of Standard & Poor's 500 Index members, Bloomberg reported, citing people familiar with the situation, who asked not to be identified because the details were private.

Uber would raise at least $1 billion, with T Rowe Price Group Inc in discussions to become a new investor, according to people with knowledge of the situation. Existing investor Fidelity Investments would also participate in the funding.

A $35 billion to $40 billion valuation would see its $17 billion value from a June financing, which was a record for a US technology startup in a round of direct investment more than double.

In the event of Uber completing the financing that could see its value above that of:

  • Tesla Motors Inc, with a market value of $31 billion
  • Netflix Inc, at $21 billion
  • Alcoa Inc, at $20 billion
  • Charles Schwab Corp, wealth manager worth $37 billion
  • Delta Air Lines Inc and American Airlines Group Inc, with market caps of $37 billion and $32 billion, respectively.

While that's a big valuation, it might be justified by the size of the potential market and how richly other fast-growing technology companies were being valued, Bloomberg said in another report.

According to Anand Sanwal, chief executive officer of New York research firm CB Insights, at this valuation, investors appeared to be thinking that whenever Uber went public, it might be worth $80 billion to $100 billion, Bloomberg reported. He added, this type of mega-financing afforded Uber a great deal of flexibility in terms of when they might go public.

It would also put Uber at about 1.5 times the capitalisation of microblogging site Twitter and at the same size as Inc as also Kraft Foods Group Inc.

It would dwarf car-rental company Hertz, with its market $11 billion market capitalisation.

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