PayPal is investing $500 million into Uber as part of the ride-hailing firm's $90 billion IPO

Jerod Harris/Getty Images for FortuneUber CEO Dara Khosrowshahi

PayPal will invest $US500 million in Uber, the ride-hailing company revealed in an updated IPO filing on Friday.

Uber is preparing to go public on the New York stock exchange, and set its share price at $US44 to $US50 per share in an amended S-1 filing to the SEC. At the high end, this price would peg Uber’s valuation at around $US84 billion to $US90 billion.

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According to the filing, PayPal has agreed to invest in Uber through a private placement at the IPO price.

In its filing, Uber wrote: “PayPal, Inc. has entered into an agreement with us pursuant to which it has agreed to purchase $US500 million of our common stock in a private placement at a price per share equal to the initial public offering price. This transaction is contingent upon certain closing conditions, including the closing of this offering and certain regulatory approvals.”

PayPal is already an Uber payments partner and, along with the funding, will deepen its ties to the ride-hailing firm. They have agreed to expand the existing partnership, and PayPal will explore helping Uber build out its digital wallet.

Dan Schulman’ PayPal president and CEO, said: “This is another significant milestone on our journey to be a platform partner of choice, helping to enable global commerce by connecting the world’s leading marketplaces and payment networks.”

Uber’s enormous public offering marks a run of tech IPOs that includes rival Lyft and Pinterest. According to the Wall Street Journal, its IPO will be the second biggest in tech history, behind Alibaba.

The ride-hailing firm’s IPO is being closely watched for several reasons: the company has said it may never make a profit; it still faces multiple regulatory and legal battles around the world, and main US peer Lyft has seen its share price plummet during its single month as a public company.

“We are still barely scratching the surface when it comes to huge industries like food and logistics, and how the future of urban mobility will reshape cities for the better,” wrote CEO Dara Khosrowshahi in the filing.

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