With a $51 billion valuation, ride-sharing company Uber has four times the combined value of two of the giant car rental companies. The newest investors in the latest round of fund-raising that brought in close to $1 billion include tech giant Microsoft.
With the infusion of fresh capital, Uber would expand operations in new markets such as China, India and Southeast Asia which are experiencing urban boom that requires taxi services and vehicle rentals.
Besides Microsoft, the investment unit of Bennett Coleman & Co., a media conglomerate in India, also invested in Uber, reports The Wall Street Journal. Uber confirmed it filed over two months ago with Delaware's Secretary of State the new funding but declined to comment on further speculation on the identity of its new investors, according to USA Today. The documents places Uber's outstanding shares at 3.5 billion.
Microsoft is known for investing in companies it wants to do business. The software giant acquired in 2007 a 1.6 percent stake in Facebook by investing $240 million that led to product integration. As a result, Bing search engine, owned by Microsoft, was used to power Facebook's software, noted The New York Times. Uber, in turn, acquired a stake in Microsoft's mapping technology and offered employment to 100 employees of Microsoft.
Other tech giants had previously invested in Uber. The list includes Baidu, China's biggest search company, and Times Internet, a digital venture of the Times of India Group.
Unlike the two car rental giants - Hertz which is valued at $7.8 billion and Avis at $25 billion - Uber is not a car service company and does not own vehicle fleets to maintain, which keeps costs down. Maintenance costs, insurance, gas and other expenses belong to the car owner. What Uber does is match drivers with commuters.
Established in San Francisco in 2009, Uber is now in 58 countries in Europe, Asia and the Middle East. However, it has encountered opposition from local drivers in some cities such as Paris and New York.