US-based ride hailing service Uber revealed today it plans to raise up to $9bn in its initial public offering and has secured a $500m commitment from payment technology provider PayPal.
The company plans to issue 180 million shares on the New York Stock Exchange priced between $44 and $50 each, which would raise between $7.92bn and $9bn. PayPal will buy another $500m of shares through a private placement.
Uber runs an app-based on-demand ride service spanning 63 countries in addition to food delivery and last-mile delivery services. Its core ride hailing service has 91 million monthly active users and its UberEats offering 15 million.
The offering follows some $10.5bn in equity funding, not including the capital raised by subsidiaries such as Uber China, which was later sold to peer Didi Chuxing in an all-share deal, and Uber ATG, which recently closed $1bn in funding.
Should the company float at the top of its range, it will be valued at approximately $84.7bn. Telecommunications group SoftBank will remain Uber’s largest shareholder despite its stake being cut from 16.3% to 12.8%.
The firm, which headed up a consortium that invested $1.25bn at a $68bn valuation in December 2018 along with $7.2bn of secondary shares at a $48bn valuation, will sell 5.45 million shares in the IPO, for a total of up to $273m.
Internet and technology group Alphabet, which led Uber’s $361m series C round in 2013 at a $3.5bn valuation, before returning for a $1.2bn series D that valued it at $18.2bn the following year, will retain a 4.2% stake, down from 5.2%.
Uber’s other notable investors are venture capital firm Benchmark, which will sell more than 5.7 million shares to come out with an 8.5% stake post-IPO; and the Saudi Arabian state-owned Public Investment Fund, which will have a 4.3% stake post-offering.
Other selling shareholders include VC firms Lowercase Capital (a 2.5% stake post-IPO) and First Round (2.2%), and private equity group TPG (1.9%), as well as BlackRock, General Atlantic, Summit Partners and Founder Collective.
The offering is being handled by a team of 29 underwriters who will have the 30-day option to buy a further 27 million shares, potentially pushing its size to almost $10.4bn. They also have the option to sell 5.4 million shares to Uber drivers.
Software provider Microsoft, media groups Axel Springer and Bennett, Coleman & Co, internet company Baidu and automotive manufacturer Toyota are also among the ride hailing company’s corporate backers.
Uber’s other investors include Fidelity Investments, Goldman Sachs, Menlo Ventures, LetterOne, Bezos Expeditions, Wellington Management, Kleiner Perkins Caufield & Byers, New Enterprise Associates, Qatar Investment Authority, Valiant Capital Partners, Dragoneer, Lone Pine Capital, Sequoia Capital, Citic Bank, Hillhouse Capital, Data Collective, CrunchFund and Innovation Endeavors.
