Term Sheet

The latest on private equity, M&A, deals and movements — from Wall Street to Silicon Valley

Will Google invest in Uber?

July 25, 2013: 10:24 AM ET

121102034507-uber-iphone-app-gallery-horizontalRide-sharing company Uber nears large new funding round with some unexpected investors.

FORTUNE -- On-demand ride service Uber is in advanced talks to raise at least $150 million in a new round of funding from some unusual sources, Fortune has learned.

Private equity firm Texas Pacific Group is expected to lead the round after beating out several other bidders, in one of its very few deals that would not include majority ownership. In fact, it wouldn't even be close since Uber is asking for a pre-money valuation well north of $3 billion. There also is a possibility that some, or all, of the investment could come from TPG's growth equity affiliate.

Google Ventures also is expected to participate, alongside certain existing shareholders like Benchmark. This also is a bit unusual, given that Google Ventures typically invests in smaller, earlier-stage companies. That's probably why I originally heard were that the later-stage "Google Capital" would invest – particularly since it recently poached TPG partner Gene Franz – but that does not seem to be the case (btw: quotation marks around "Google Capital," since that unit doesn't technically exist… yet).

RELATED: A conversation with Uber's Travis Kalanick

Certainly an interesting pairing for this type of deal, although few traditional VC firms could lead a deal of this size and there clearly is strategic wisdom in Google (GOOG) getting  tighter with Uber – particularly after its recent Waze acquisition (even though Google Ventures runs as an independent unit within the tech giant).

Uber founder and CEO Travis Kalanick is not planning to sell any of his own shares in this transaction. The overall company loses money, but individual geographic markets are profitable once Uber achieves a certain level of scale. Its revenue margins are estimated at between 20% and 30% of bookings.

This is still a fluid situation, with Kalanick suggesting to me on Tuesday night that much of what I'm hearing comes from an "echo chamber" (albeit without me having first disclosed specifics of what I'd heard). But I got a bit more sourcing done after originally reporting some of these details in yesterday's Term Sheet email, and am comfortable that this is where things currently stand.

AllThingsD also is reporting the TPG and Google Ventures involvement this morning.

Both TPG and Google Ventures declined to comment.

Brlow is video of Kalanick being interviewed earlier this week at Fortune BrainstormTech in Aspen:

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About This Author
Dan Primack
Dan Primack
Senior Editor, Fortune

Dan Primack joined Fortune.com in September 2010 to cover deals and dealmakers, from Wall Street to Sand Hill Road. Previously, Dan was an editor-at-large with Thomson Reuters, where he launched both peHUB.com and the peHUB Wire email service. In a past journalistic life, Dan ran a community paper in Roxbury, Massachusetts. He currently lives just outside of Boston.

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