The Rise of Uber

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Uber and its incredible growth

So many of you will have heard of the very popular taxi app Uber. They have taken the taxi world by storm in a very short space of time having notable press coverage. CEO and co-founder Kalanick has imposed a very aggressive global expansion strategy which is causing a stir, with presence in 36 countries and 118 cities.

The valuations on Uber have been astronomical with figures of $12-18 billion being thrown about! To put this in comparison, Manchester United Football Club, one of the worlds biggest football clubs, are currently valued at $2-3 Billion.

Let’s take a look on the right to see how legitimate this valuation is. These valuations of $12-18 billion are based on Uber raising another $500 million in the coming months. Currently, to this day uber have raised $307.5 million. Here’s their journey since 2009:
– August 2009 – Raised $200,000
– October 2010 – Raised $1.3 million
– February 2011 – Raised $11 million
– December 2011 – Raised $37 million
– August 2013 – Raised $258 million
– Total to date – Raised $307.5 million

Uber: What is it worth?

To get a current valuation is usually to look at current revenues with a multiple of around 10x. Leaked figures in November last year showed in a 7 day period from November 13th 2013 to 20th November 2013 Uber worldwide recorded revenues of $22,103,756. It was reported that in FY 2013 Uber recorded profits of $750 million which equates to $14.42 million per week.

Uber App

Working on a 10x multiple of revenues this would value Uber at a cool $7.5 Billion. This is only the start as Uber have projected revenues of $3 billion in 2014 which would in turn, with a 10x multiple, value the company at $30 billion. Again, let me put this into perspective, Uber would be able to purchase the four biggest football teams in the world based on market cap, Real Madrid, Barcelona, Bayern Munich and Manchester United all at once if they fancied it.

The big question is will Uber just sell out? Surely every company has a price but CEO Kalanick recently responded to a probing question with a witty answer “You’re asking a happily married man who his next wife will be” – this is clearly a man that’s in it for the long run (both in business and marriage by the sound…!)

The Uber story has only just began and with the current management behind it, with the main goal of global aggressive expansion, who knows where they could be in five years time? For sure they are just getting started in markets such as Europe with many more cities to target. Rolling out in mainland China is massive given the trouble other ‘western’ firms (e.g. Facebook) have had in the region, not to mention the sheer size and scope of the Chinese market. Exciting times ahead for Uber – we’ll have to see what happens!

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