Uber, the app-based transportation network and taxi company headquartered in San Francisco, California, has raised $1.6 billion in convertible debt from Goldman Sachs’ private wealth arm.
The investment bank confirmed the news on Wednesday.
The startup will use the money to expand its presence in international markets, improve safety, and invest in research and development, according to Bloomberg.
To date the company has raised more than $4 billion.
Last month Uber said it raised $1.2 billion in a round of funding, giving the company a market valuation of $40 billion. It raised $1.2 billion in June last year – when it was valued at $17 billion.
It has also been reported that Uber could raise another $600 million in stock from hedge funds and overseas investors.
Uber now has more incentive than ever to go public
The securities sold to Goldman’s clients can be converted into shares when the company issues shares on a public exchange – at a discount of the price set in its IPO.
A person familiar with the matter has told the media that the six year bond comes with a coupon that will rise if Uber does not go public within four years. In this context, ‘coupon’ means the annual interest rate paid out.
Uber is by far the market leader in its segment, going public would provide it a healthy cash infusion to ensure its long-term success.
The company’s service is available in 53 countries and more than 200 cities worldwide, giving it a much bigger presence than any of its rivals. In fact, a number of other companies have emulated Uber’s business model, a market trend that is now being called “Uberification”.