Uber could raise up to $1 billion in a bond deal that signals it's preparing to go public, says the Wall Street Journal. Fred Katayama reports.
Uber is about to pick up some more Chinese money. The Wall Street Journal says the ride-sharing service could raise up to $1 billion in a convertible bond deal with one of Asia's biggest fund managers, Hillhouse Capital. It's a sign Uber is gearing up to go public. That's because the bonds convert into shares at a discount to the IPO price, so the longer Uber takes until its debut, the higher the bonds could rise in value, increasing the costs to Uber. Uber considers China its top priority. It plans to invest more than $1 billion there this year and roughly quintuple the number of cities it serves over the next year. The road has been rough for Uber as it battles protests by taxi firms there and raids on its offices by local authorities. The Journal says the deal in the works also raises concerns. Hillhouse has a stake in Uber's biggest Chinese rival, Didi Kuaidi, which has a 90 percent share of the market, IPOfinancial.com president David Menlow sees no conflict of interest, saying, "I believe it's a way of diversifying. The question from the U.S. perspective is, how easy is it to get into the overseas markets and realize their investment return potential?" The Journal says Uber plans to use the cash from deals like this one to expand in emerging markets and subsidize and develop news businesses and products.