Despite a recent streak of catastrophic PR, Uber Inc. and its blazing growth profile retain their allure to investors.
The car-hailing app maker may be ready to tap Chinese web services company Baidu Inc. for major backing, Reuters reported, just weeks after raising $1.2 billion from unnamed investors early in December.
A day earlier, Fortune magazine suggested that even tech-averse Warren Buffett's Berkshire Hathaway Inc. (BRK.A) should consider deploying some of its $60 billion in cash to purchase a controlling stake of Uber, which is reportedly valued at $40 billion.
Uber has international ambitions. The company operates in 250 cities in 50 countries, and CEO Travis Kalanick said in a blog post the company would use the latest funds to expand in Asia.
Some localities have pushed back against Uber. Indian capital New Delhi blocked the service over licensing violations, and Uber had already drawn fire for its screening policies because of an alleged rape by a driver in the city.
District attorneys of San Francisco and Los Angeles Counties have reportedly filed a consumer protection suit. There have been challenges to the service from Madrid to Thailand.
Uber compounded the bad press when a senior executive suggested launching smear campaign against a journalist critical of the company, which backer Ashton Kutcher endorsed in a tweet.
CEO Kalanick said in a December blog post would invest in "internal growth and change" and would seek to be "smarter and more humble" as it deploys its model globally.
The business has grown six-fold in the last year, and Uber said it will generate more than one million jobs around the world in 2015.
An individual familiar with the company's thinking said Uber has no plans to sell itself.
Speculation of a $100 billion valuation for the company has been enough to entice pre-IPO hedge fund investors, however.
Increasingly — as with the secondary market feeding frenzy that unfolded leading up the IPOs of both Facebook Inc. (FB) and Twitter Inc. (TWTR) — hedge funds, instead of venture capital firms, which traditionally provided the most late-stage financing, or private equity shops, which have sought to buy into hot startups in recent years, have been aggressively buying up stakes of technology companies, muddling the capital structure leading up to offerings
Baidu's recent investments have been domestic. The company consolidated its ownership of Chinese e-commerce company Nuomi Holdings Inc. with a $160 million purchase of minority shares earlier this year. In 2013, Baidu purchased Chinese applications distribution company 91 Wireless Websoft Ltd. and Chinese online video company PPStream Inc.
Cash-rich Chinese companies have increasingly put money in U.S. tech and media companies. Alibaba Group Holding Ltd. (BABA) was part of a group that invested $250 million in similar ride service Lyft in April.
Uber's technology is proven. With Kalanick's pledged humility, and better attention to licensing and driving screening, Uber could better achieve its global ambitions.