Reeling from the effects of the COVID-19 pandemic, ride-hailing giant Uber Technologies Inc (NYSE:UBER) has sold stakes worth $500 million in its Uber Freight business unit. The company sold the stakes to investment firm Greenbriar Equity in a Series A preferred stock financing.
Uber Freight $500 Million Investment
The $500 million transaction values Uber Freight at close to $3.3 billion. Under the terms of the agreement, Greenbriar managing partners Michael Weiss is to join Uber Freight Board. However, Uber maintains a majority stake in the logistics arm that connects truck drivers with shipping companies.
Launched in 2017, Uber Freight has grown to become an important component of Uber vast empire that includes ride-hailing services, packaging food, delivery, and Micromobility. Uber spun Uber Freight into a separate business, a move that has allowed it to grow immensely and become a force to reckon with in the logistics business.
Pursuit of Uber Freight investment comes when an Uber has resorted to offloading prospective units after coming under pressure in the wake of the COVID-19 pandemic. The company has already offloaded Jump and trimmed down its stakes in delivery unit Postmates.
Uber Freight Expansion
Uber Freight now includes a redesigned app with features that ease searching and filtering loads easier. It has also expanded its footprint and services into Canada and Europe; thus, the hefty $3.3 billion valuation continues to enjoy.
The logistics unit has since established a headquarters in Chicago as part of a long-term investment of more than $200 million. The unit also plans to hire more than 2,000 new employees to ramp up operation over the next three years.
The expansion drive is already bearing fruit, with the unit experiencing a jump in revenues. The unit registered a 27% increase in revenues in the second quarter at $211 million. The increase came even as the COVID-19 pandemic continued to take a toll on the larger logistics segment. However, the unit is yet to become profitable. Net loss in the second quarter shrunk to $49 million compared to a net loss of $52 million reported a year ago.