Uber Technologies Inc. raised $1.6 billion in convertible debt from Goldman Sachs Group Inc.’s wealth management clients, according to people with knowledge of the matter, as the mobile car-booking company builds its finances to expand internationally.

Uber is also still in talks to raise $600 million from hedge funds and international strategic investors to add to $1.2 billion in financing that it raised in December, said the people, who asked not to be identified because the information isn’t public. The funding last month valued San Francisco-based Uber at $40 billion, one of the highest valuations for a closely held technology startup.

The car-booking company plans to use the new money to roll out its service in more cities internationally and to invest in research and development and improving safety, said the people.

Representatives at Uber and Goldman declined to comment.

The convertible note and continued talks for more equity funding underline Uber’s endless appetite for cash as the company moves its operations into new cities worldwide, a task that requires plenty of capital. The company has raised more than $4 billion in funding — both through convertible debt and cash — since it was founded in 2009. Uber operates in 277 cities in 54 countries and has said it was opening in a new town every other day. It has about 2,000 employees.

The bond Uber placed with Goldman Sachs’ private clients is a six-year bond that will convert into equity at a 20 percent to 30 percent discount to Uber’s valuation at the time of an initial public offering, people familiar with the situation told Bloomberg News last month.

The convertible bond carries a coupon that increases over time if Uber hasn’t gone public within 4 years, the same people have said.

Baidu’s Investment

Uber has previously attracted international investors. Baidu Inc., China’s biggest Internet search engine, said in December it agreed to invest in Uber to expand competition in China’s car-booking market. The market for car-booking services in China has been dominated by startups backed by Alibaba Group Holding Ltd. and Tencent Holdings Ltd., the nation’s biggest Internet companies. Baidu has declined to comment on the value of its Uber stake.

Uber, led by Chief Executive Officer Travis Kalanick, has roiled transportation markets worldwide by letting people hail rides from their smartphones. That has disrupted established taxi and limousine companies, which have responded with protests in many places where Uber has introduced its service. Uber has also upset regulators, who have sued or banned the company from California to Brazil.

Uber Pool

Uber’s mobile app offers a range of car-booking services, from black cars to ride sharing. The company is looking to expand the car-pooling service, dubbed Uber Pool, which is now available in San Francisco, New York and Paris, the people said.

Kalanick said in Munich on Jan. 19 that he will add 50,000 jobs in Europe if European cities from Milan to Madrid change their regulations to let Uber to operate legally.

“We want to make 2015 the year where we establish partnerships with new European cities,” Kalanick said at the annual Digital Life Design conference at the time. “If we can find a regulatory framework that makes this a reality, we can promise jobs and less congestion. The impact we can bring to cities is huge.”

This article was written by Serena Saitto from Bloomberg and was legally licensed through the NewsCred publisher network.

Photo Credit: Uber has raised more money to fuel expansion. Skift