Uber Scores $500 Million Investment From PayPal Ahead of Upcoming Initial Public Offering
Uber estimates that its IPO will fetch $10 billion in fundraising from shares priced $44 to $50.
As Uber begins the roadshow ahead of its initial public offering, it will receive a significant influx of cash and support from long-time partner PayPal. According to a post by PayPal President and CEO Dan Schulman on LinkedIn, the digital payment service will invest $500 million into Uber via a purchase outside of the public offering.
By continuing to expand its operations with PayPal, Uber is on its way to strengthening its position as a "super app," a gateway for purchasing multiple forms of goods and services, albeit focused on the niche market of transportation and logistics. Presently, Uber offers ride-sharing, freight services, food delivery, urban mobility, and has been investing in autonomy, as well as air transport.
"Since 2013 we have supported Uber’s payments capabilities as their lead payment processing partner in the U.S. and Australia," wrote Schulman in his statement on the matter. "Today, I am thrilled to announce that we have reached an agreement to extend our global partnership with Uber and intend to explore future commercial payment collaborations, including the development of Uber’s digital wallet. Additionally, we have agreed to invest $500 million in a private placement."
According to sources familiar with the situation, PayPal's concurrent private placement will be valued proportionately to Uber's IPO pricing. An updated filing made by the ride-sharing company on Friday now targets its IPO in a range from $44 to $50 per share, valuing the company's market cap alone as high as $84 billion.
While this assessment is significant, it's also a large drop from the projected $120 billion valuation that the company was seeking just two weeks ago. Ride-sharing rival Lyft was recently valued at $24 billion in March during its own IPO, raising about $2.34 billion in initial funding. Uber estimates that its own IPO will rake in around $10 billion in funding.