If you believe the valuations set in its latest round of fundraising, Uber Inc is worth $18.2 billion, making it the second highest valued venture-backed startup in history, surpassed only by Facebook Inc (NASDAQ:FB)’s $50 billion valuation before it went public, report Evelyn M. Rusli and Douglas MacMillan for The Wall Street Journal. Uber uses a smartphone app to coordinate rides and facilitate payments between drivers and riders in 130 cities.
“We are at or below the multiples that you see public companies are getting on their revenue and forward looking revenue. Especially given our growth, we would be way off the charts,” said Uber CEO Travis Kalanick, but he wouldn’t give any hard numbers to back up the valuation.
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Revenue doubling every six months: Uber CEO
He says that revenue is doubling every six months and that the number of trips is growing five- or six-fold (an ad hoc metric that sounds an awful lot like ‘eyeballs’), but he doesn’t actually say how much revenue the company has (nor does he mention corporate profits, of course). But he argues that comparing Uber to the taxi and limousine sector underestimates its potential.
Taking San Francisco as an example, he says that the total spend on taxis and limousines is around $120 million, but that Uber is already making several times more than that. The total spend on ground transportation in San Francisco (including public transport, taxis, and people who own their own vehicles) is around $22 billion, and Kalanick sees his company as cutting into that much larger market share.
Uber experimenting with a logistics service
Uber is also working on logistics services, but Kalanick said that this is still in the very early stages and that he didn’t pitch the idea during the fundraising process. Still, he has discussed the new service before and the high valuation could be a sign that VC funds are including the logistics business when figuring out their investment’s potential upside.
If Uber can repeat its San Fran success in most of the markets its already operating in it would easily deserve the $18.2 billion price tag, but without some more data we can only speculate. The good news is that we don’t have to worry about it anytime soon, because Kalanick doesn’t see an IPO in the company’s immediate future.