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Uber boasts $1.2B new funding, with a slice of humble pie

The ride-sharing service, which looks to be valued at roughly $40 billion, says its missteps over the past few weeks are driving it to become "smarter and more humble."

Dara Kerr Former senior reporter
Dara Kerr was a senior reporter for CNET covering the on-demand economy and tech culture. She grew up in Colorado, went to school in New York City and can never remember how to pronounce gif.
Dara Kerr
2 min read

Uber CEO Travis Kalanick says he's working to make a "smarter and more humble" company. Stephen Shankland/CNET

Uber, the world's highest-valued venture-backed company, just got a lot richer even as it tries to cope with what its founder calls "significant growing pains."

The ride-sharing service announced Thursday that it raised a new round of funding totaling $1.2 billion, which likely pegs the company's valuation at between $35 billion and $40 billion. The San Francisco startup doesn't expect that money to burn a hole in its pocket.

"In 2015 alone, Uber will generate over 1 million jobs in cities around the world," Uber CEO Travis Kalanick wrote in a blog post Thursday. "This kind of continued growth requires investment."

Uber, founded in 2009, operates in more than 250 cities in 50 countries and says it's expanding quickly, with the new funding to be used to move into new markets in the Asia Pacific region.

Before this funding round, Uber already topped the list of the world's most valued, venture-backed companies, with a valuation of $18.2 billion. Its closest rivals in that regard are Airbnb, Xiaomi, Dropbox and Snapchat -- all of which are valued at about $10 billion each.

While Uber is flush with cash, it's also had to deal with bad publicity. It's gained notoriety for its competitive tactics against its ride-sharing rival Lyft and against taxi companies, as well as its hard-knocks attitude toward government regulators. The past few weeks have been especially rocky after BuzzFeed reported that one of Uber's executives, Emil Michael, said he would like to spend $1 million to "dig up dirt on its critics in the media." Another BuzzFeed journalist reported that Uber's New York general manager tracked her without her knowledge.

These reports prompted scores of Uber users to delete their accounts and Sen. Al Franken (D-Minn.) to send a letter to Kalanick about privacy concerns. Meanwhile, Uber did little in terms of damage control. It didn't heed calls to fire Michael and the New York general manager, leading critics to say Uber's corporate culture is to blame for the executives' missteps.

"Acknowledging mistakes and learning from them are the first steps," Kalanick wrote in his 361-word post. "We are collaborating across the company and seeking counsel from those who have gone through similar challenges to allow us to refine and change where needed."

Uber, he added, is turning over a new leaf. "The events of the recent weeks have shown us that we also need to invest in internal growth and change."

Uber will make changes in coming months, though Kalanick offered no real details. The company will work toward "new standards in data privacy," give back more in cities where it operates and work toward refining its company culture. "Done right," he wrote, "it will lead to a smarter and more humble company."