Travis Kalanick, CEO of Uber, in Beijing.
Photograph by ChinaFotoPress via Getty Images
By Dan Primack and Erin Griffith
December 3, 2015

There were two major developments on Thursday in the world of ride-hailing.

First, Uber is in the midst of raising $2.1 billion in new private equity funding at a whopping $62 billion valuation. For context, that’s higher than the market cap of General Motors (GM), and it was done at fairly standard terms (1x liquidation preference, no “ratchets”). Second, four Uber rivals from around the globe have signed a “strategic partnership” through which they’ll work together on both technology and services. The new partners are Lyft (U.S.), Didi Kuaidi (China), GrabTaxi (SouthEast Asia) and Ola (India).

In other words, it’s now Uber vs. the world. Which is why it’s so surprising that Uber’s new financing round is being co-led by Tiger Global, which previously invested in Didi Kuaidi, GrabTaxi, Ola and Lyft (that last one is indirect, as Lyft raised money from Didi Kuaidi). Keep your enemies so close that they’re on your cap table?

Sources familiar with the situation say that Tiger is committing more to Uber in this round than it invested in any of the other three companies, which helped make Uber more comfortable with its inclusion. For Tiger, it was less about hedging and more about a platform coverage (i.e., there can be multiple winners, particularly as some of the companies expand beyond consumer transportation). Moreover, the two sides worked out an information-sharing plan that would avoid either one from being put in an awkward position (which, presumably, means very little information will actually be shared).

The deal also reflects how much of Uber’s growth is outside of the U.S., despite regulatory challenges and homegrown rivals. For example, five of its ten largest global markets are in China, where a company spokesperson claims it has between a 25% and 30% market share of all completed private car trips. In India, Uber claims around a 40% market share.

From a fundraising perspective, that international growth means:

  1. Uber feels more confident about its competitive position, so is willing to take on an investor like Tiger Global. This is a far cry from last year, when Uber CEO Travis Kalanick openly bragged to Vanity Fair about trying to disrupt Lyft’s fundraising efforts.
  2. Uber wants to maintain momentum — including adding new markets — but needs new outside capital to do so. But because it already has raised so much money from so many big investors, it can no longer be quite so choosy when it comes to new shareholders.

Uber has not yet closed the new financing round, nor does it have verbal commitments for the entire $2.1 billion. Expect that it will follow the same process we’ve seen in the past, where it holds a quick first close in order to set the terms — in this case with Tiger and T. Rowe Price — and then works to fill out the remaining book.

For Uber’s most recent stock certification in Delaware, where the new valuation was first disclosed, see below (courtesy of private market data provider VC Experts):

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