Uber’s reported bid of up to $3 billion to acquire Nokia’s mapping service is a large amount of money for a private company.
But for Uber, which has a $41.2 billion valuation and is currently raising a funding round of $2.8 billion, it’s in line with everything it has done so far.
“It’s an unusual and huge acquisition, but everything about this company is outsized and unusual,” said Max Wolff, chief economist at Manhattan Venture Partners.
The New York Times reported earlier that the ride-hailing app has put in a bid to acquire Nokia’s Here, a mapping service. The deal, if it succeeds, would make it more of a stand-alone platform and make it more independent of Google Maps.
Uber declined to comment.
The offer doesn’t necessarily mean that Uber is ramping up to go public, said Wolff. Instead, it may partly be a way to distance itself further from Google
whose venture arm has invested in Uber.
Uber has already taken what seem like competitive measures against Google by partnering with Carnegie Mellon to develop driverless cars and mapping.
“Their relationship with Google has clearly soured,” said Wolff.
But acquiring its own mapping service could make Uber look better to investors if it goes public or raises another private round of funding. The Uber app uses mapping to show users the nearest drivers.
While it’s unusual for a private company to make a big acquisition, Uber is not the first. Facebook
acquired Instagram for $1 billion in cash and stock in April 2012, while it was still a private company. Facebook went public the following month.
The Instagram acquisition was said to be a power move by Facebook to neutralize a competing startup.
And Uber may not win the bid, as it’s up against heavyweight auto makers BMW
Audi and Mercedes-Benz
the Times reported.
The ride-hailing company has grown rapidly and expanded its funding round by $1 billion in February to total $2.8 billion. According to The Wall Street Journal, Uber told investors it would have more than $2 billion in revenue in 2015.
Uber may be the “extreme” example of private companies staying private longer, but Wolff said it will have to go public to give its investors a return at some point.
“It can’t be that far off,” he said.