Uber has just secured a round of funding from Chinese investment management firm Hillhouse Capital Group, according to the Wall Street Journal. The total investment could be up to $1 billion, though people familiar with the matter told the WSJ the amount will likely clock in at “hundreds of millions of dollars.”
The move is yet another indication that Uber plans to go public soon, especially given that, as the WSJ notes, the investment is a convertible bond deal, which “involves purchasing bonds that convert into shares at a discount to the ride-hailing company’s IPO price.” In other words, the longer Uber puts off its initial public offering, the greater the return for investors. The company previously raised $1.6 billion from Goldman Sachs in a similar deal back in January.
In an email made public earlier this month, Uber CEO Travis Kalanick informed investors that the company’s global team was making expansion into China its “number one priority,” with plans to invest $1 billion in the country this year. Despite regulatory pressure, Uber has already made significant strides into the Chinese market, drawing in nearly 1 million trips a day and procuring partnerships with tech giants like Baidu.
That said, Uber still has ample competition in Didi Kuaidi, a taxi-hailing app that monopolizes 90% of the Chinese market. It just so happens that Hillhouse Capital Group has also invested in Didi Kuaidi, which the WSJ reports has “raised some concerns.”
[via the Wall Street Journal]