Uber Confirms New $1.2B Funding Round, Looks to Asia for Expansion(techcrunch.com)
techcrunch.com
Uber Confirms New $1.2B Funding Round, Looks to Asia for Expansion
http://techcrunch.com/2014/12/04/uber-confirms-new-1-2b-funding-round-looks-to-asia-for-expansion/
20 comments
Have any of the released Uber decks show when profitability is expected and what their run rate is? Curious how long VC money can fund cheap rides for.
The rides are not really cheap. At best, in nyc, uber x is advertised to be cheaper than a taxi but that is really not always the case.
Forgive my terribly silly question then. If Uber is skirting the regulatory cost of a medallion for each vehicle in service, why is the cost the same as a taxi paying that expense?
Because it turns out the medallion cost is only a small part of the operating cost of a cab.
"TLC’s medallions held by fleet owners, who collect rent of up to $132 a shift from drivers"[1]
NYC cabs run on 2 12-hour shifts a day. This works out to ~$13/hr to pay for the medallion itself. This isn't nothing, but ultimately the cost of the car, gas, insurance, etc, are still the dominant factors in operating a cab.
So yeah, theoretically without the medallion cost Ubers can be cheaper than a regular taxi, but probably not by all that much.
[1] http://www.thenewyorkworld.com/2014/01/20/taxi-medallions/
"TLC’s medallions held by fleet owners, who collect rent of up to $132 a shift from drivers"[1]
NYC cabs run on 2 12-hour shifts a day. This works out to ~$13/hr to pay for the medallion itself. This isn't nothing, but ultimately the cost of the car, gas, insurance, etc, are still the dominant factors in operating a cab.
So yeah, theoretically without the medallion cost Ubers can be cheaper than a regular taxi, but probably not by all that much.
[1] http://www.thenewyorkworld.com/2014/01/20/taxi-medallions/
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> why is the cost the same as a taxi paying that expense
Uber is trying to maximize their revenue
Uber is trying to maximize their revenue
Why would they do that? They have competition, even if it doesn't seem so obvious right now, and a larger percentage of nyc's cab market share seems much more valuable. Especially if it's so easy for them to raise money.
Can you really not think of reasons why they'd want to maximize revenue? Here are a few thoughts, off the top of my head:
* room to drop prices at the right moment, when it would most affect competitors
* more money in the bank means less pressure to raise money (before today; I'd guess this is the last big round they do). Less pressure means they can wait until they get a better deal for current stakeholders
* they don't think price is the determining factor for market share. I'm seeing Uber and Lyft mutually differentiate corporate personality to avoid being commoditized for each other
* people tend to judge safety / quality by price -- if they were 50% cheaper, people might be sketched out
* maximizing revenue also maximizes money in their driver's pockets -- they need high quality, reliable drivers, and thus need to pay them decent wages.
Those are just a few reasons why they would maximize revenue pre-VC money.
Those are just a few reasons why they would maximize revenue pre-VC money.
Uber take quite a big cut don't they?
It's why I find it hard to helieve they can out-compete in cities where there's already an open market (medallions seem to be a weird US thing?)
It's why I find it hard to helieve they can out-compete in cities where there's already an open market (medallions seem to be a weird US thing?)
Nop, they are common in Europe too. Although most european countries have severily limited the operation of Uber, so...
UberX pricing feels comparable, on average, to Yellow/Green Cabs for me, in Brooklyn. Sometimes it might be more expensive, sometimes less, but it mostly around the same. I take Uber probably 5-8 times a week.
UberX is almost always less expensive than a taxi. Certain NYC trips might be an exception.
It could easily be profitable tomorrow if it scaled back growth. Gross revenue run rate is around $10b and net revenue $2b. And growing very rapidly. Riders pay for their rides so I have no idea what your VC reference means.
The cheap rides are passed on to the drivers, which some of them are not too happy about http://losangeles.cbslocal.com/2014/09/02/uber-defends-slash..., Uber still takes a cut off the transaction.
Investment rounds like this worry me - Uber is already doing fine, and making money. An injection of cash like this will help them expand to new markets (fine) and also absolutely flatten competition in existing markets (bad).
They could drop the price of Uber X (again) but absorb the cost to drivers, edging Lyft out of the market. As long as they beat Lyft before the investment cash runs out, they win the market and are free to raise prices again. I don't want Uber to become the new taxi monopoly off the back of VC cash.
They could drop the price of Uber X (again) but absorb the cost to drivers, edging Lyft out of the market. As long as they beat Lyft before the investment cash runs out, they win the market and are free to raise prices again. I don't want Uber to become the new taxi monopoly off the back of VC cash.
This business is a natural monopoly, which is exactly what the VCs understand. There won't be competition, because whoever has the most customers can offer the best prices to customers, and the most earnings to drivers. The winner can suffocate the competition.
It's basic game theory, if I run an operation that does 10,000 rides a day, and my competitor does 5000 rides per day, I can tweak prices and wait times such that the competing service is strictly inferior for both drivers and passengers.
It's basic game theory, if I run an operation that does 10,000 rides a day, and my competitor does 5000 rides per day, I can tweak prices and wait times such that the competing service is strictly inferior for both drivers and passengers.
By that logic, all businesses with economies of scale are "natural monopolies". That's nonsense, because it assumes that everything else (particularly income per ride and cost per ride) are the same, or at least that they can be the same at a whim.
And in practice, we see smaller companies competing successfully with larger ones all the time.
And in practice, we see smaller companies competing successfully with larger ones all the time.
Indeed, a lot of businesses with economies of scale and network effects can become monopolies. If we want to experience the benefits of free-market and competition, from a consumer point of view, we need to implement it through regulations. Peter Thiel explains it quite well, businesses want monopolies because they can reap a higher share of the value. Competition redistributes value to the customers. Once we recognize this, we can ask where, as a society, it makes sense to foster competition.
Which businesses have become monopolies through economies of scale? Can you give me some examples?
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There's a huge liquidity advantage, relatively unique to this market, that is difficult to compete against.
Presuming you can block your drivers from working for rival services simultaneuosly.
Hardly difficult. Once you have a monopoly position you just add a clause to the terms and conditions that you may only use Uber if it's the only service you're signed into at the time.
I always thought Uber avoided such a clause now and would continue to do so in the future, regardless of monopoly status, because their contractors being reclassified as employees would be disastrous to their business model.
But how do you get the monopoly position in the first place? Also, that assumes the law doesn't invalidate those clauses.
As I said in the original post, by using VC cash to undercut competition and drive them out of business.
And others can't get VC cash, why?
VC cash isn't infinite, and the amount available today won't last indefinitely. And are many VCs really likely to invest in a new startup when Uber just got over a billion dollars of cash? You can be as innovative and disruptive as you want, you're still going to have an extremely hard time beating a company with $1.2bn in the bank.
Anti-trust violation
On-demand business maybe. But pre-arranged car service business (where majority of transactions is airport pick-ups/drop-offs) is very fragmented, and Uber is just another player there.
If you don't need on-demand availability, Blacklane.com or Limos.com are consistently cheaper than Uber Black.
And if you are okay with waiting for maybe an hour or so, Sidecar is usually a better deal for longer distances.
If you don't need on-demand availability, Blacklane.com or Limos.com are consistently cheaper than Uber Black.
And if you are okay with waiting for maybe an hour or so, Sidecar is usually a better deal for longer distances.
Umbrellas at the ready, the mess is going to be big when this bubble eventually bursts. Sure, I see the value of services like Uber, but there are so many ridesharing services in the market offering a decent product, Lyft arguably has a better app. While I don't doubt its usefulness, I don't think Uber is worth $40b. Especially considering it was only valued at roughly $17b in the summer which was what, like 6 months ago? A $23b jump in value in six months, seems kind of unrealistic to me, but that's how it works in tech.
I don't want to see Uber fail, because I hate catching taxis, but I think there needs to be a serious reality check here. The business model that Uber runs upon is still relatively unregulated & fragile, and as shown in Vancouver, cities and Governments have the power to easily drive out services like Uber. Not to mention the pressure from taxi lobbyists.
I don't want to see Uber become a monopoly, but this cash injection can only mean that Uber will aggressively attempt to drive out its competitors therefore becoming a monopoly and in the process, a splitting image of the broken taxi industry they are trying to disrupt. As history has shown, when you have next to no competition, you stop innovating. Lets just see how this plays out.
I don't want to see Uber fail, because I hate catching taxis, but I think there needs to be a serious reality check here. The business model that Uber runs upon is still relatively unregulated & fragile, and as shown in Vancouver, cities and Governments have the power to easily drive out services like Uber. Not to mention the pressure from taxi lobbyists.
I don't want to see Uber become a monopoly, but this cash injection can only mean that Uber will aggressively attempt to drive out its competitors therefore becoming a monopoly and in the process, a splitting image of the broken taxi industry they are trying to disrupt. As history has shown, when you have next to no competition, you stop innovating. Lets just see how this plays out.
> I don't want to see Uber fail, because I hate catching taxis
I want to see Uber in particular fail because of their horrible treatment of drivers, spying on (and publicly shaming the habits of) their riders, threatening journalists over negative press, and because of their shady business practices in general.
I want to see ridesharing as a service succeed, as I think it is the future of taxi service. But I want Uber to either go away completely, or else reorganize as a positive, beneficial company instead of a cancer with douchebags at the helm.
I want to see Uber in particular fail because of their horrible treatment of drivers, spying on (and publicly shaming the habits of) their riders, threatening journalists over negative press, and because of their shady business practices in general.
I want to see ridesharing as a service succeed, as I think it is the future of taxi service. But I want Uber to either go away completely, or else reorganize as a positive, beneficial company instead of a cancer with douchebags at the helm.
Those are pretty strong words, "a cancer with douchebags at the helm." Any personal experiences that motivated these words other than joining in the hatred hive mind fostered by the media?
> Those are pretty strong words
> joining in the hatred hive mind fostered by the media?
Pretty strong words on your part as well, but whatever, I'll answer. No, I decided a while back that if I ever need a ride, it won't be in an Uber car. This decision was based not only on what's in the regular media, but from reading personal experiences of riders and drivers in forums like this and larger media like Facebook and Twitter. I've read a few good, positive things about Uber in the past few years, but as a whole I consider them to be hostile and extremely slimy.
Simply put, I formed an opinion, as is my right, and it's a strong opinion so I use strong words to convey it.
Pretty strong words on your part as well, but whatever, I'll answer. No, I decided a while back that if I ever need a ride, it won't be in an Uber car. This decision was based not only on what's in the regular media, but from reading personal experiences of riders and drivers in forums like this and larger media like Facebook and Twitter. I've read a few good, positive things about Uber in the past few years, but as a whole I consider them to be hostile and extremely slimy.
Simply put, I formed an opinion, as is my right, and it's a strong opinion so I use strong words to convey it.
Yes, personally I wouldn't go that far - but at the same I would never use Uber as management do, at the least, sound like jerks. I think this is an entirely reasonable position drawn on evidence presented across multiple media reports about Uber's behaviour, and quotes from management.
Hm... it might be a stupid question, but by "ridesharing service", do you mean Uber, or something else? To me, Uber doesn't seem a ridesharing service, merely a Taxi on demand with a nice phone+GPS app.
I thought that was the official name for Uber/Lyft/etc.
Uber's "ridesharing" service, UberX, is and will continue to be, its biggest business.
Yes. Uber can fail, but ridesharing/e-hailing/etc needs to succeed against entrenched interests while working towards sensible government regulation.
If I may make the counter argument here, nobody except perhaps the odds makers in the bay area, are going to note or care if Sequoia Ventures loses all of its investment in Uber, or if Menlo does, or if KP does. It will show up on CNBC as "Well its been a bad year for Venture Capital firms, probably not going to host lavish parties..." but for most people who don't work at a company that goes 'poof' because it ran out of money and couldn't raise more, its really a non issue.
For bubbles to really be bubbles they need broad participation, and VC funding really is limited in how many people can participate.
For bubbles to really be bubbles they need broad participation, and VC funding really is limited in how many people can participate.
Disagree with almost everything you've written. It's a winner-take-most/all, trillion plus dollar market. Investors getting in at $40b, besides having little downside due to preferences, will almost certainly make a reasonable return. Uber is already on track for $1b in revenue and continues to grow very rapidly. Governments have in fact shown no ability to stop Uber (only a very few instances in the entire world). Peter Thiel would argue (effectively, imo) that monopolies are important in driving innovation.
> Governments have in fact shown no ability to stop Uber
Governments have not seriously tried to stop Uber yet. If/when they do, they will easily succeed.
Right now, the farthest most have gone is fining drivers a relatively small amount, which Uber pays. What happens when they step that up to seizing the car? Who is going to sign up to be an Uber driver in a city where it can get your car seized?
Here's how I predict it will go down. Cities will eventually decide to legalize Uber-type services, with such companies required to obtain a license. There will be a limited number of companies licensed in each city--it makes much more sense for the city and its citizens to have a small number of healthy companies than to have a large number of companies barely scraping by. Those licenses will go to Lyft and other non-Uber services, because they have not had the "fuck you" attitude that Uber has.
That's when the cities will crack down severely on Uber.
Governments have not seriously tried to stop Uber yet. If/when they do, they will easily succeed.
Right now, the farthest most have gone is fining drivers a relatively small amount, which Uber pays. What happens when they step that up to seizing the car? Who is going to sign up to be an Uber driver in a city where it can get your car seized?
Here's how I predict it will go down. Cities will eventually decide to legalize Uber-type services, with such companies required to obtain a license. There will be a limited number of companies licensed in each city--it makes much more sense for the city and its citizens to have a small number of healthy companies than to have a large number of companies barely scraping by. Those licenses will go to Lyft and other non-Uber services, because they have not had the "fuck you" attitude that Uber has.
That's when the cities will crack down severely on Uber.
I can't think of anything that would stop governments destroying Uber - is there anything? They've already started getting banned in various places, and it's not hard to write laws to enforce a taxi monopoly.
They're doing well but I don't see anything that would stop government regulating them out of existence. They're no, say, Bitcoin in that regard for sure.
They're doing well but I don't see anything that would stop government regulating them out of existence. They're no, say, Bitcoin in that regard for sure.
Well, so far constituents and a bit of common sense have stopped government action in almost every locale.
Uber is already on track for $1b in revenue*
*gross revenue. Big difference.
*gross revenue. Big difference.
Actually on track for $10b gross and $2b net.
I can only find one source[0] and it's source is quoted as "is what I'm hearing" for an estimate at the end of the FY2015 (13 months from now). That's pretty bold stance without any real confirmation.
[0] - http://www.businessinsider.com/ubers-revenue-2014-11
[0] - http://www.businessinsider.com/ubers-revenue-2014-11
Either way, the $1b is net, not gross.
I think you're worrying far too much about valuations at various rounds. Personally, I have no idea if Uber is worth $40bn. It just doesn't matter. When Uber IPOs, what "pop" do you expect if their market cap is $20bn instead of $40?
This figure might be wrong but the entire US taxi industry makes a revenue of $11 billion per year. Since US forms about 20% of the world's economy, we can assume the global taxi revenue to be $50 billion. Even if Uber takes in 20% from every ride, I can't imagine them possibly having more than $10 billion in revenue. Assuming Uber forms a 60% monopoly, they won't be making more than $6 billion in revenue. Kindly correct me if I'm completely off here.
One way for Uber to overcome this is to bet on the growth of the taxi industry in Asia. But, even in Asia, governments are pouring in massive investments into public infrastructure. When I visit New Delhi, I rarely end up in a cab because the public infrastructure isn't all that bad. Public transportation projects are coming up in even the smallest of Asian cities. If things go well, people won't need an Uber for most occasions because you'll have to wait 5 minutes for a bus/tube/{new disrupter}!
This is what might happen. Uber is going to have a massive IPO with a highly overvalued P/E (this is what the VCs are betting on). Then, after a few years, the market will realize that this world is finite, unlike their greed (have twitter's investors started realizing that?). What happens next is that everyone looses.
Uber deserves credit, just not this much!! There are other big problems the world must focus on. The short nearsightedness of humans is the biggest obstacle to our own growth.
One way for Uber to overcome this is to bet on the growth of the taxi industry in Asia. But, even in Asia, governments are pouring in massive investments into public infrastructure. When I visit New Delhi, I rarely end up in a cab because the public infrastructure isn't all that bad. Public transportation projects are coming up in even the smallest of Asian cities. If things go well, people won't need an Uber for most occasions because you'll have to wait 5 minutes for a bus/tube/{new disrupter}!
This is what might happen. Uber is going to have a massive IPO with a highly overvalued P/E (this is what the VCs are betting on). Then, after a few years, the market will realize that this world is finite, unlike their greed (have twitter's investors started realizing that?). What happens next is that everyone looses.
Uber deserves credit, just not this much!! There are other big problems the world must focus on. The short nearsightedness of humans is the biggest obstacle to our own growth.
I think Uber in this case managed to capture a large demographic of people who do not take taxis, but who are willing to pay for Uber, hence the market for Uber in the US is that of $11 billion/year + X billion/year of people who fall in that category.
Consider the fact that just last year, Uber had more than $10 billion in transaction (keeping 20% of that as revenue)
Consider the fact that just last year, Uber had more than $10 billion in transaction (keeping 20% of that as revenue)
How big would the ridesharing market be if it became cheaper than car ownership?
We already have a ridesharing system which is much cheaper than car ownership and that system is called Public transport. I'm not entirely sure how Uber could turn into a system cheaper than London's tube or Delhi's metro. Plus, these systems are raising far bigger rounds than the $1.2 billion Uber just raised.
Was Uber designed to be the cheapest form of transport? I doubt it. You have pure convenience on one end (car ownership) and pure cost saving on the other (public transport) on the other. The taxi system lies in the middle, so does Uber. Taxis will have a space in the transportation market, just not the biggest space. I might be wrong here!!
Was Uber designed to be the cheapest form of transport? I doubt it. You have pure convenience on one end (car ownership) and pure cost saving on the other (public transport) on the other. The taxi system lies in the middle, so does Uber. Taxis will have a space in the transportation market, just not the biggest space. I might be wrong here!!
Ridesharing has the potential to be cheaper than car ownership while still being as fast and convenient -- or even more fast and convenient.
The same can't be said for public transit, except for trips that happen to follow a major train line.
The same can't be said for public transit, except for trips that happen to follow a major train line.
Major public transport lines are decided based on how people travel. It would be safe to say that a well designed system would cater to 80% of the distance I travel on any given day. That leaves 20% for ride sharing if I don't feel like walking for 15 minutes.
So I purchased a nice toyota for about $15,000 about 4 years back. 600 miles per month, 25 mpg, about $100 on gas every month, about $1200 every year. Assuming that I use this car for another year, I paid out $3000 for every year + $1200 on gas=$4200 /year (I'm sure my car will last far more than 5 years). Uber is about a dollar per mile. So every month I would have to pay $600, every year about $7200. You could try and hook me up with another person traveling the exact same route, but that is going to be a very uncertain thing even if you have the relevant technology. Even a small degree of uncertainty will lead me to buy a car.
Now if I used public transport, I would pay less than $1000/year. Plus, there wouldn't be much uncertainty. I think the world would be a much more efficient place if we tried to make the $1000 ride more convenient/efficient, than if we tried to bring down the cost of a $7200 ride (although I hope they can do it, would love to see how they do it).
I never said ride sharing is all doom and gloom, I'm just saying it will have a smaller space in terms of number of people traveling.
So I purchased a nice toyota for about $15,000 about 4 years back. 600 miles per month, 25 mpg, about $100 on gas every month, about $1200 every year. Assuming that I use this car for another year, I paid out $3000 for every year + $1200 on gas=$4200 /year (I'm sure my car will last far more than 5 years). Uber is about a dollar per mile. So every month I would have to pay $600, every year about $7200. You could try and hook me up with another person traveling the exact same route, but that is going to be a very uncertain thing even if you have the relevant technology. Even a small degree of uncertainty will lead me to buy a car.
Now if I used public transport, I would pay less than $1000/year. Plus, there wouldn't be much uncertainty. I think the world would be a much more efficient place if we tried to make the $1000 ride more convenient/efficient, than if we tried to bring down the cost of a $7200 ride (although I hope they can do it, would love to see how they do it).
I never said ride sharing is all doom and gloom, I'm just saying it will have a smaller space in terms of number of people traveling.
Honest question: what is the return multiple that an investor expect when he/she invests in a $40bi valuation?
If Angels & Seed expect 100x; VC expect 10x; I imagine these investors expect as much as a common stock exchange investor: 1.2x a year?
If Angels & Seed expect 100x; VC expect 10x; I imagine these investors expect as much as a common stock exchange investor: 1.2x a year?
My guess would be a $100b market-cap IPO in the next 12-18 months is what they're hoping for. Long enough to grow more, but quickly enough to get out before the regulatory hammer starts to fall.
It's crazy to think a certain venture capital firm could have invested around $50 million in late 2011 for just over 12% of the company—a stake that'd be valued at around $5 billion now—but quibbling over the valuation killed the deal.
http://www.vanityfair.com/business/2014/12/uber-travis-kalan...
http://www.vanityfair.com/business/2014/12/uber-travis-kalan...
How much does Uber spend? How could they possibly need to raise that much?
Uber spends a lot to acquire new drivers. They hire staff to recruit them, give them a new phone, and give the driver a signing bonus.
The drivers pay for the phones now, by the way, at $10/week deducted automatically from their fares. They also recently released the driver app for iOS and Android for personal phones, too, so they (and the drivers) can forgo some of that cost.
They've also changed their take rate on drivers. New drivers IIRC are at 25%, older partners are at 20%, but maybe this varies on city.
They've also changed their take rate on drivers. New drivers IIRC are at 25%, older partners are at 20%, but maybe this varies on city.
> The drivers pay for the phones now
depends on the market. here in são paulo, drivers told me that they gave them phones + gave them a "working rate" (as in, as long as you are online and working you will get a per-hour-rate even if you don't get any passengers).
depends on the market. here in são paulo, drivers told me that they gave them phones + gave them a "working rate" (as in, as long as you are online and working you will get a per-hour-rate even if you don't get any passengers).
Scaling done right. It's kind of awesome seeing such a company blow up like this.
I think that a lot more competitors in the near future will enter the market (as Uber pretty much validated the market for them) but Uber will remain the biggest and baddest. Uber will probably become very big, then diversify in some way (just like Google did) and then Uber will be established. Maybe 'Ubering' will even become a word just like 'googling'... heh, funny. But hey, it's all speculation from this point imo.
Time will tell.
I think that a lot more competitors in the near future will enter the market (as Uber pretty much validated the market for them) but Uber will remain the biggest and baddest. Uber will probably become very big, then diversify in some way (just like Google did) and then Uber will be established. Maybe 'Ubering' will even become a word just like 'googling'... heh, funny. But hey, it's all speculation from this point imo.
Time will tell.
It's a popular meme in tech journalism that Uber is "under attack" for its nefarious business practices, but how much has this sense pervaded outside the tech bubble?
My wife (mid-20s) and her friends were going to take one for the first time after I told them about it as they were headed to Chicago for the weekend. They all got scared and took a cab instead because they had never heard of Uber and didn't trust it. Nothing I could say would convince them otherwise, they need to hear about it from other sources to think it's legit.
People just don't know about Uber. They're not recognizable enough (no advertising).
People just don't know about Uber. They're not recognizable enough (no advertising).
Its bubbled up to the New York Times. Otherwise, if fails my "mom test", so its still a niche service IMO.
What's your "mom test"? My (mid-60s) mother uses Uber, as do some of my middle-aged friends, even if it's far less popular there than it is among my friends in their 20s.
A trillion dollar niche!
That trillion dollars is forward-looking, and not based on current revenue. It may well end up being a mainstream, household name before too long, but not yet.
When talking about the niche, no need to limit to one company's current run rate. And see gurley for how it's potentially a trillion dollar "niche".
On Facebook I've seen people post about it. These are people who might have a job in tech (e.g. marketing at a tech company) but for the most part don't read Hacker News or tech articles often. Keep in mind there were some late night television shows covering the issue and a few politicians peaking in for review. I think it is an issue with some appeal to those outside of tech, but for the most it doesn't seem to be an issue. I mean NSA spying and privacy issues don't get the masses to delete Facebook accounts or Gmail, so it certainly won't stop Uber.
Outside the tech bubble and the big cities, the viewpoint is generally "What's Uber?" and "What's AirBnb?" I even have had Uber drivers in big cities who had no idea what AirBnb was.
It must be hard for Travis to manage all this growth. I always wondered what the next Google was and I never expected it would be a taxi ride sharing company.
Uber seems a lot more like the next Netscape. Super-fast growth, media darling, natural monopoly, took lots of capital, ultra-hyped valuation, arrogant, and threatening to a lot of powerful people.
Google, if you remember its growth period, basically came out of nowhere. It was beloved by users and adoption grew rapidly, but they didn't start getting serious publicity (nor did they seek it) until around 2004. They, AFAICT, took only one round of funding, $25M in 2000, before attaining profitability sometime in 2002. And they worked very hard to seem non-threatening until they were big enough to actually be a threat: remember "we do only one thing and one thing well - Search", "Don't be evil", their cordial relationship with Apple, the explicit decision not to challenge Microsoft, and how they only took advantage of companies that were going out of business anyway?
Google, if you remember its growth period, basically came out of nowhere. It was beloved by users and adoption grew rapidly, but they didn't start getting serious publicity (nor did they seek it) until around 2004. They, AFAICT, took only one round of funding, $25M in 2000, before attaining profitability sometime in 2002. And they worked very hard to seem non-threatening until they were big enough to actually be a threat: remember "we do only one thing and one thing well - Search", "Don't be evil", their cordial relationship with Apple, the explicit decision not to challenge Microsoft, and how they only took advantage of companies that were going out of business anyway?
That's almost 3 whatsapps.
Congratulations to the team. Although lately I feel like Dr. Evil and his 1 million ransom when I see that kind of valuations thrown around.
Congratulations to the team. Although lately I feel like Dr. Evil and his 1 million ransom when I see that kind of valuations thrown around.
Well, not exactly. Whatsapp has been sold for $19B, this is a _valuation_ of $40B. I think selling something for $19B is bigger than being valued at $40B and getting $1.2B in funding.
Huge numbers though, I can't realistically appreciate these amounts.
Huge numbers though, I can't realistically appreciate these amounts.
With $2b in revenues vs ~$0, I'd put the Uber valuation in the bigger category.
The more interesting bit for me is that a lot of smaller players are also getting traction (GrabTaxi, Lyft, etc) so what that says to me is that folks have decided that this will be the new way rides are done and are trying to get in on that shift. It seems that a lot of the existing cab companies are private so there isn't an easy way to short their stock to double down on the bet.
Ah, I have thought of Uber as UPS for people. Door to door routing, with out me having to think of all the logistics would be a thing of beauty.
Numbers like these (also for Whatsapp) only show that the US$ is way overrated and a massive crash is probably due in a couple years.
Didn't PG say that mean people fail?
The power of product market fit.
Surge pricing for investors?
good luck in China where carpooling was considered as illegal.
Under the same leadership?
Hey look, the cancer is spreading.
Though, I'm sure that the people here will justify Uber's merely superficial bad behavior. After all, silicon valley can do no evil, and accumulating profit at all costs is the best way to advance human society, right? Stay classy HN.
Though, I'm sure that the people here will justify Uber's merely superficial bad behavior. After all, silicon valley can do no evil, and accumulating profit at all costs is the best way to advance human society, right? Stay classy HN.
I will never use an Uber car due to the activities they have been caught participating in. Everybody around me knows that I have intense dislike for them and recommend Lyft instead.
However, I feel like your comment is unfair in attacking HN - Most of what I've read against Uber has come from this site.
Either way, I was very disappointed to see today's news.
However, I feel like your comment is unfair in attacking HN - Most of what I've read against Uber has come from this site.
Either way, I was very disappointed to see today's news.
Neither Travis Kalanick or any current senior execs sold any stock in the current round.
Uber will either be the biggest boom or bust story there's been in quite some time. This will be fun to watch.