Uber is in Talks for a $500 Million Investment in its Uber Freight Unit
Ride-sharing company Uber Technologies Inc. is seeking an outside investment in its Uber Freight unit, Bloomberg has reported. According to the report, Uber is in talks with investors interested in taking a stake in its Uber Freight division, according to people with knowledge of the matter.
According to Bloomberg, San Francisco-based Uber held discussions to raise $500 million in a funding round that would give its freight business a standalone valuation of about $4 billion after the deal, said one person, who requested anonymity because the talks are private. However, no transaction has been finalized and the terms could change.
"While it's not unusual for us to receive interest for investment in Uber Freight, we are not able to comment on rumors about these discussions," an Uber spokesman said to Bloomberg.
Currently, Uber Freight operates as a broker, using Uber's mapping and routing technology to match shippers with available truck drivers. The division of Uber set out to disrupt the antiquated way brokers and truck drivers traditionally do business. Uber Freight adds transparency and efficiency in payments as well as route scheduling, powered by Uber's platform.
"In freight, you have a similar story to what you had with taxis," he says. "There's little visibility into where loads or trucks are, and it's an error prone process that often leaves drivers with the short end of the stick, missing shipments or being short-changed on fees," said Eric Berdinis in 2017, former product lead for Uber Freight.
Uber Freight is now a standalone subsidiary of Uber.
Uber Freight was formed after Uber acquired self-driving truck startup Otto in 2016. Otto was co-founded by former Google employees Anthony Levandowski and Lior Ron and others. At the time, Uber was aiming to add driverless trucks to Uber Freight in the future as part of an autonomous logistics service.
Levandowski was a top engineer for Google's self-driving car project for over a decade. In Jan 2016, he was leading Google's (now Alphabet Inc.) work on lidar technology for autonomous driving division Waymo when he suddenly resigned without notice and co-founded Otto, taking several key Google employees with him in his new venture.
Shortly afterwards, Uber purchased Otto for around $680 million in 2017 in order to jumpstart its own autonomous driving development. Levandowski was eventually put in charge of Uber ATG, the division of Uber working exclusively on autonomous driving technology. Otto's work on self-driving trucks was then merged into Uber Freight.
The self-driving trucks for Uber Freight were being developed by Uber's Advanced Technologies Group (ATG) alongside autonomous vehicles for Uber's ride-hailing platform. Uber ATG division is tasked with developing the autonomous driving technology for the company.
Last September, Uber said it was establishing Uber Freight's new headquarters in Chicago, and announced plans to hire 2,000 new employees to work in the office, most of whom would be dedicated to the effort.
Uber became a public company in May 2019, launching one the biggest IPO's in recent history. Uber's market cap is just under $57 billion. However its stock has never risen above its all-time high of $45.63. Uber shares closed today up 6% at $32.81.
Uber's largest investors include SoftBank Group Corp., Benchmark and Saudi Arabia's Public Investment Fund (PIF).
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