Whatever misgivings people have about Uber Inc., they’re certainly not shared by venture capitalists, who’ve just ploughed another $1.2 billion into the popular car-sharing app.

Uber says it generated the cash in a private equity fundraising round, which apparently put the firm’s valuation at a staggering $41 billion. If true, Uber is now right up there with some of the biggest names in Silicon Valley, including Yahoo! Inc. (valued at $47.1 billion), whose valuation is more solidly based on market capitalisation data dervied from actual share prices, rather than just investor’s opinion.

No doubt there will be lots of critics suggesting that Uber’s new valuation is way off the mark. Its previous valuation led to howls of skepticism. For example, Aswath Damodaran, Professor of Finance at the Stern School of Business at New York University, calculated that the global taxi industry is worth a mere $100 billion a year and said Uber might only get about 10 percent of this, consequently putting its value at a more modest $6 billion.

But regardless of its true valuation, Uber CEO Travis Kalanick is determined to make sure the company expands, in spite of its recent controversies. “This kind of growth has also come with significant growing pains. The events of the recent weeks have shown us that we also need to invest in internal growth and change,” he said in a blog post.

Besides fighting off privacy concerns and regulatory problems, Uber faces stiff competition on other fronts. Its biggest rival at home is Lyft, which follows a similar business model and is competing with it in major US cities like New York and San Francisco, and is also facing regulatory scrutiny.

In Europe, Uber faces competition from Hailo, a similar kind of app that works with registered taxis rather than private drivers. Then in Asia, its efforts are being frustrated by the Singapore-based GrabTaxi, which only yesterday grabbed $250 million in funding from Japan’s SoftBank to help expand its business there.

Uber will most likely use a significant amount of its financial resources to fight off these challenges. In his statement, Kalanick said Uber was planning “substantial investments, particularly in the Asia Pacific region.”

photo credit: Philipp Lücke via photopin cc