SEVEN31

Life as I know it...

Charting Uber's Massive Valuation

In early-May, it was widely reported that the ride-sharing company, Uber Technologies, was planning a new capital raise of $1.2 to $2.0 billion that would peg the company's value at or above $50 billion.  That is a staggering number. Consider this, at $50 billion, the company has been essentially given the same value as Netflix and roughly $16 billion more than Tesla. We're talking about a company that owns virtually no assets and relies on a prominent network of contractors throughout the world that literally moves people from point A to point B. And that's probably the biggest point of all, the business model is not constrained by the capital needed to buy and sustain physical assets - it's completely reliant on the exponential growth of both drivers and riders to continue using its service. This is the essence of the sharing economy - exponential business models that leverage mobile technology to enable sharing.

Uber did an initial capital raise around July-2010, which staked its value at approximately $60 million. Given its recently "reported" $50 billion dollar valuation, you derive a Compound Annual Growth Rate (CAGR) in its value of 284%. I think its safe to label that as "exponential":

  *Sources for valuations obtained from numerous sources - dates of funding / valuations are approximate.

*Sources for valuations obtained from numerous sources - dates of funding / valuations are approximate.