Online payments company PayPal is going to be investing $500 million in ride-sharing company Uber, according to an updated S-1 filing for the IPO. This news comes on the heels of Uber actually reportedly lowering its anticipated IPO offering due to the market’s bearish response to Lyft’s IPO.
Uber’s updated filing says that PayPal will be making the investment in Uber through a concurrent private placement at the IPO price. This investment is made as an extension of the partnership between the two companies as they plan to create new digital wallet services together. PayPal has been available as a payment option through Uber since 2013 in the U.S. and Australia.
“Since 2013 we have supported Uber’s payments capabilities as their lead payment processing partner in the U.S. and Australia. 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,” wrote PayPal president and CEO Dan Schulman in a LinkedIn post. “Additionally, we have agreed to invest $500 million in a private placement. This is another significant milestone on our journey to be a platform partner of choice, helping to enable global commerce by connecting the world’s leading marketplaces and payment networks.”
This is the second major pre-IPO investment that Uber revealed this month. Earlier this month, Uber announced it received a $1 billion investment from SoftBank, Toyota, and Denso — which valued Uber’s Advanced Technologies Group (autonomous vehicle subsidiary) at $7.25 billion.
In Uber’s updated IPO filing, the company set a price range of $44 to $50 per share. This would value Uber at $84 billion at the high end as it plans to sell 180 million common shares. And Uber is seeking nearly $10 billion in the IPO. Uber is believed to have started the IPO roadshow on Friday.
Initially, Uber was seeking a $120 billion valuation based on what bankers were expecting. However, now it is closer to the $76 valuation that Uber was given based on its last private fundraising round. For the first quarter of this year, Uber is expecting to post a loss of between $1 billion and $1.1 billion.
In 2018, Uber’s revenues hit $11.27 billion and the company saw net income of $997 million. But the adjusted EBITDA losses were $1.85 billion. The monthly active platform users went up to 93 million from 70 million the previous year.
Uber will be going public on the NYSE under the symbol “UBER.” Uber’s rival LYFT trades on the NASDAQ.
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