Fresh off a $1.2 billion funding round, Uber has apparently added another $1.6 billion in convertible debt through Goldman Sachs to its stockpile. Bloomberg, citing “people with knowledge of the matter,” reports that Uber has arranged a six-year bond with Goldman Sachs’ private clients that, if Uber were to go public, could be changed into stock at a discount of 20 to 30 percent from the IPO price. All in all, Uber’s funding in both convertible debt and cash now easily tops $4 billion, and it might not end there—Uber is still in discussions to raise another $600 million in stock from hedge funds and strategic international investors.
What will Uber do with all this money? Well, a lot of things. As I recapped at the end of December, Uber is fighting regulatory battles and outright bans across the globe and no doubt pouring funds into what is effectively a huge political campaign for ride-hailing apps. Uber is also (hopefully) beefing up its public relations staff and local management teams to avoid more of the embarrassing blunders that dogged it in 2014. Uber’s ambitions also extend far beyond providing on-demand rides and even making car ownership obsolete. As Uber chief executive Travis Kalanick has said, “If we can get you a car in five minutes, we can get you anything in five minutes.” If services like UberRush and UberFresh take off, Uber could become an all-encompassing instantaneous delivery platform, one to possibly rival Amazon.
Meanwhile, this new round of funding hands Uber an even bigger cash advantage over its current crop of competitors. Lyft, arguably the company’s biggest rival, has just $332.5 million in six rounds from 15 investors, according to CrunchBase. That imbalance might make it easier for Uber to build a virtual monopoly over ride-sharing apps.
And if that’s the case, we should probably be worried. After all, one major concern with Uber, as econ blogger Steve Randy Waldman astutely noted in late December, should be “ensuring that no single price-coordinating ‘platform’ dominates the nascent on-demand transportation industry.” As Uber deepens its already-deep pockets, preventing that outcome looks increasingly difficult.