Microsoft Reportedly Invests in Uber
According to reports, Microsoft has invested about $100 million in Uber, the controversial taxi-replacement service. That investment values Uber at an incredible $51 billion, and was part of a $1 billion financing round that concluded Friday.
While it’s clear why Uber would be seeking additional financing—the firm is expanding its operations worldwide while fending off various legal attacks—Microsoft’s involvement is less obvious.
Microsoft has not yet commented on the investment. But when questioned about Microsoft’s involvement, Uber offered the following curt response.
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“We filed to authorize this new funding more than two months ago. The filing is available to the public. We aren’t commenting on additional speculation.”
A bit over a month ago, however, Microsoft announced that it was selling some of its Bing mapping technologies to Uber, and that about 100 employees would move to Uber as part of the deal. The scaling back was part of a broader strategy change to focus on core businesses, but was not as well-publicized as the epic failure of Windows Phone and Microsoft write-down of its Nokia hardware and services businesses purchase. But the basic message was the same: Microsoft is not getting out of this business, but it is scaling back its participation greatly.
“Over the past year, we have taken many actions to focus the company’s efforts around our core business strategy,” a Microsoft spokesman said at the time. “We will no longer collect mapping imagery ourselves, and instead will continue to partner with premium content and imagery providers.”
Uber had previously pursued Nokia’s HERE mapping and location technologies, which are also used by Microsoft in Bing Maps and elsewhere. So the Microsoft deal could help the firm bolster its in-house mapping capabilities.
“Mapping is at the heart of what makes Uber great,” Uber spokesperson Kristin Carvell said. “So we’ll continue to work with partners, as well as invest in our own technology, to build the best possible experience for riders and drivers.”
Microsoft and Uber are also partnering to bring Uber into Microsoft’s Cortana, that digital personal assistant software in Windows 10. In a demo, Microsoft showed how Cortana could automatically reserve an Uber car ahead of a scheduled meeting.
Given these deals, the investment may simply formalize a growing partnership between two companies whose interests are starting to overlap. Uber’s mission of using technology to efficiently route rides for those with that need aligns nicely with Microsoft’s productivity-focused business strategy. But Uber also provides Microsoft with a partner that can compete with Google’s map-based driverless car efforts. And a future tie-up involving Microsoft Azure is almost inevitable.
As for Uber, this recent round of financing comes at an interesting time, with the firm hitting the $50 billion valuation two years faster than did Facebook. Uber was previously valued at $40 billion, and its service is now available in over 300 cities in almost 60 countries. But governments of all sizes have sued Uber or, in many cases, simply banned the service from operating in their locales. The legal uncertainties and pending court cases make a future IPO somewhat daunting.