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Uber Raises Funding at $62.5B Valuation
- free2rhyme214 11y agoTheir IPO is going to be huge.
- Matt_Mickiewicz 11y agoWhew! I get worried when more than 60 days goes by without them announcing a MegaRound(tm) at an InsaneValuation(R).
- MitjaBezensek 11y agoThat's close to Basecamps valutation :) https://medium.com/@jasonfried/press-release-basecamp-valuation-tops-100-billion-after-bold-vc-investment-c221d8f86ad7#.k5znmketf https://medium.com/@jasonfried/press-release-basecamp-valuat...
- myth_buster 11y agoReminded me of the SV episode where Russ Hanneman asks Richard to not generate revenue because once you do people would start quantifying it. If they don't generate revenue then the sky is the limit!
- tomasien 11y agoThey make a ton of revenue....
- myth_buster 11y agoThey make a ton of revenue.... I was commenting on the medium article linked which said... In order to increase the value of the company, Basecamp has decided to stop generating revenue. “When it comes to valuation, making money is a real obstacle. Our profitability has been a real drag on our valuation,” said Mr. Fried. “Once you have profits, it’s impossible to just make stuff up. That’s why we’re switching to a ‘freeconomics’ model. We’ll give away everything for free and let the market speculate about how much money we could make if we wanted to make money. That way, the sky’s the limit!”
- tomasien 11y agoGOTCHA gotcha.
- toby 11y agoI swore I had read this before... https://signalvnoise.com/posts/1941-press-release-37signals-valuation-tops-100-billion-after-bold-vc-investment https://signalvnoise.com/posts/1941-press-release-37signals-...
- jedberg 11y agoThey re-release it every time some company gets a crazy valuation based on a small investment.
- viscanti 11y agoA small investment of 2B.
- jedberg 11y agoSmall as in percent, not dollar amount. :)
- viscanti 11y agoAt $2B, I think the money talks. There's certainly some threshold where dollar amount matters. It's trivial to throw away a dollar. There are very few places that can afford to be as flippant with $2B. At some point, you're voting with dollars, and the percentage becomes much less relevant.
- chollida1 11y agoSo by now Uber has raised capital and debt from: - some pretty famous angle investors - some pretty famous venture capital funds - some pretty famous investment banks - some pretty famous private equity firms - some pretty famous hedge funds - some pretty famous mutual funds It's worth asking, if they have reached the point where their success becomes less about their execution, though that's still important, and more of a self fulfilling prophecy. I mean you now have some very influential people to call on if you need help on navigating the IPO process, or government lobbying for rules changes, etc. I've completely changed my mind on Uber, 18 months ago I would have felt nervous as employee joining them when determining if my options would be worth much. Now, I'd be asking if i could put 50% of my paycheck towards buying more options. Steve Balmer was famous for acquiring as much Microsoft stock as he could, even after he became the CEO. I'd be mimicking Steve Balmer here and acquiring as much Uber as I could right now.
- Retric 11y agoThere is limited upside at 60+billion.
- adventured 11y agoDefinitely. It's one of the best reasons to pursue the famous venture capital firms. John Doerr has a lot of important people's phone numbers, and they will take his call (with the same obviously being true about maybe two dozen other famous investors). It's why Dropbox put Condoleezza Rice on its board. It's why Gilead had Donald Rumsfeld as its Chairman. It's why Theranos has an all-star line-up on its board. Business is, always has been, and always will be, heavily about networks. You can do it without them, it's just drastically harder.
- matthewowen 11y agoMy understanding is that Uber is currently providing new hires with RSUs, not options (so valuation growth isn't necessarily necessary). I could be misinformed.
- dubroff 11y agoWhat do you mean by "valuation growth isn't necessarily necessary"?
- paxtonab 11y agoI think Uber used their last round of funding to poach the entire Carnegie Melon robotics department for their self-driving cars, so it will be interesting to see they do with this $2.1 billion dollars.
- prbuckley 11y agoLyft "lost $127 million in the first half of 2015 on $46.7 million in revenue, according to the documents. Lyft said last month that it has gained market share in key markets, such as San Francisco, and has a gross revenue “run rate” of $1 billion." I had no idea lyft was losing 3x the their revenue. That is crazy.
- jscottmiller 11y agoAnecdotal evidence, but I've hardly paid for a Lyft ride (aside from driver tips) for the last few months. This thanks to a long-running 50% off promotion in my area (Austin, TX, USA) and a pile of promotional credit added to my account. I wonder how much of this loss is due to these marketing efforts. Now that the promotion is over and credit depleted, my default ride app is back to Uber.
- dopamean 11y agoI'm in Austin and basically did the exact same thing.
- xur17 11y agoI did the same thing as well. They kept claiming the promotion was about to expire, and then just created a new one. I'm waiting for another one to show up. I am curious how the promotion will work out for them long term - I'm sure some people continue using the app after signing up (stickiness), but a lot of people likely switch back to Uber since it's cheaper.
- frakkingcylons 11y agoNot to mention that for a long time, you could exploit a bug in the ride-splitting feature that allowed you to get free rides during the 50% off promotion. They applied the promotion as a credit and calculated the credit before the fare split.
- rdtsc 11y agoBecause most people Uber...? It became a "verb" and well, here we know what that means: "xerox that paper", "google this term"... Nobody is Lyft-ing and everyone is Uber-ing. Once it's verbified, it's hard for competitors to overcome it. I, for one, have used neither. But I have friends and family who travel a lot. Some are in their 20s, 30s, and some in the 60s and they all say they Uber places vs taking a taxi. They don't know about Lyft-ing. Now what is the underlying reason for that. Maybe luck, maybe time to market, maybe pricing, I can't tell you.
- srameshc 11y agoClose to 1/10th of Apple's market cap, still a huge huge number. Nearly $2bn in revenue when reported by recode on August 2015. Facebook market cap was approx $81bn when launched. Probably once it will get closer to $100bn and then we will see an IPO.
- funkyy 11y agoYet mostly still unregulated. I cant get over all the bad stuff they did to get where they are now. I am not defending taxi drivers (it seems that ANYONE against Uber business model = taxi supporter - at least according to majority of A/B society) but Uber is what corporations shouldn't be - breaking laws, throwing money to shut people and lobbying every politician they can. While I understand love by people that use it to make money or communicate, their whole model is just wrong and example of how corporation shouldn't be imo.
- blfr 11y agoIt's so easy to never deal with Uber if you don't want to that I don't see the point of regulation.
- Lawtonfogle 11y agoThe regulations often exist because of externalities to transactions. You don't directly have to deal with Uber, but you will still be impacted by their operations if they are in the same city.
- toomuchtodo 11y agoBecause Uber pushes out transportation providers who do follow the rules. Hence, regulation required.
- blfr 11y agoThis is an argument for deregulation, not regulation. Why bother with regulation in a highly competitive market?
- gnrme 11y agoRegulation protects customers and workers. It ensure travellers don't get over charged compared to other forms of public transport, it makes sure the driver isn't a criminal, it ensures the vehicle is within certain standards, it prevents a free-for-all that would push the driver's income below reasonable levels. I like the libertarian/wild west mindset of the internet. It doesn't however lend itself to integrated public transport systems - of which, private hire taxis are a part. Plus, it is replacing local businesses with a multinational that will probably send its profits to an island (like lots of other technology companies), rather than contributing to local economies. I think it is the next Groupon though, so at some point it may pop.
- blizkreeg 11y agoUber is now too big to fail. Possibly the most important company this decade. I never cease to be amazed by their phenomenal execution across the world. I was in Mexico City last week where I truly came to understand the enormous impact Uber as a company has had in these past few years. The service was highly prevalent, popular, and the experience was completely seamless — just like in the US. It barely skipped a beat. Their execution is likely a prime business case study in that no other company has built a technology business that has a huge, real-life logistical component this fast — and in dozens of cities around the world, spanning an equal number of ways of doing business and cultural barriers.
- dopamean 11y agoThe most important company this decade? I'm not saying you're wrong but I have to ask... what makes Uber so important?
- blizkreeg 11y agoTheir spread, the value of the service, how they've completely transformed an industry. It's practically on its way to becoming a monopoly in many parts of the world. Not saying that's good or bad. Just my opinion.
- demian 11y agoThe most successful redefinition of labour relations since the begining of overseas manufacturing.
- samclearman 11y agoPresumably the deal terms include a liquidation preference and thus the implied valuation is essentially horseshit.
- NDizzle 11y agoWow, we need a new monetary unit. I dub it the Lucasart, and it's worth an even $4B USD. Uber is now valued at 15.6 Lucasarts!!! Hooray and congrats to all involved in this grounded and logical valuation!
- fapjacks 11y agoHah! We play this game in the office. "Any new Space Shuttle program would cost like 0.25 <our company name>s"
- dsugarman 11y ago>The number is typically calculated by annualizing a recent week, month, or quarter of the company's gross revenue, which means actual annual revenue may differ substantially. Maybe I am reading this the wrong way but in broader context of this article it reads as they are trying to say that the actual revenue may be much lower. They should explicitly say that for a growth company like Uber, the actual revenue # would be much larger.
- viscanti 11y agoIf a company grows significantly in a year, the earnings for their most recent week would be more typical of their "size" than what they've made throughout the year. In that case, what they've made over the past year might not be a good indicator of what they'd make over the next year.
- mikeyouse 11y agoUber, Lyft, Airbnb, etc. all typically report 'Gross Revenue' which is pretty misleading since the majority of Gross Revenue is passed through to the driver / apartment owner -- That may be what that sentence is in reference to. The interesting number is 'Net Revenue' which is how much Uber actually receives to pay their bills, etc. Quick example, if 10 riders take an Uber and their cost is $20/each, Uber would report $200 in Gross Revenue. Since their driver split is something like 80/20, their Net Revenue would only be $40.
- SeeDave 11y agoFrom my limited understanding, I believe Groupon tried something similar and was shut down by the SEC during IPO.
- chris_va 11y agoFunding rounds are usually preferred stock (though I hear Uber may have done some common stock in the last round, anyone know more?). Preferred stock gets paid out first, so the actual "valuation" here is less meaningful. Preferred investors would still make a profit if Uber exited for $8B instead of 62.5B.
- askafriend 11y agoHow will this affect the employees?
- chris_va 11y agoAfter the preferred money is paid out, the preferred stock converts to common stock at some multiplier. The multiplier is usually 1x, though it varies. At that point, whatever money is left is generally split between all common shareholders (investors and employees).