Liu Zhen, the strategy chief of Uber China, said previously that Uber China is an independent company and is planning a public listing in China. However, Uber CEO Travis Kalanick hopes the company to remain private, including the China branch.
According to the fundraising documents from an investment firm obtained by Tencent Technology, Uber China believes the best year for the company to go public is 2020, while its parent company may seek public listing in 2018. The documents also showed that Uber China may list on the Shanghai Stock Exchange. Nonetheless, the information was not confirmed by Uber.
Uber previously launched a funding round with an attempt to raise US$1.5 billion to expand its business globally. The documents obtained by Tencent showed that the investment firm participated in a round that raised 700 million RMB (US$109.47 million), with the minimum of 3 million RMB, which is even lower than the minimum initial investment for the “new-three board” listed startups. The documents also showed that 80 percent of the funds will be used in Uber Global while 140 million RMB will be invested in Uber China.
In addition to the lowered minimum initial investment, Uber also promised, according to the documents, to buy back shares with compounded annual interest of 8 percent, if the company fails to go public by 2020. Unnamed investors said an 8-percent compound interest is a pretty high buy-back rate and may be designed to boost investor confidence.
The low minimum initial investment and high buy-back rate in some way suggested that Uber China’s fundraising in China did not go so well.
Many sources revealed that Uber will likely choose to list on the Strategic Emerging Industries Board on the Shanghai Stock Exchange. The Strategic Emerging Industries Board allows startups and young companies, which temporarily cannot meet the requirements on revenues, to list on the market. Uber plans to break even by 2018 and continue to lower the loss every year before that.