US-based on-demand ride service Uber filed yesterday to raise up to $1bn in an initial public offering that will enable corporates including telecommunications firm SoftBank and internet technology group Alphabet to exit.
The company plans to float on the New York Stock Exchange, but the $1bn figure is a placeholder amount. Reports earlier this week suggested it would target $10bn at a valuation of up to $100bn.
Uber’s ride hailing platform has 91 million monthly active users and is present in more than 700 cities across six continents. It is the market leader in several of the 63 countries in which it operates, most notably in the US, and also runs logistics platform Uber Freight and Uber Eats, a food delivery service with 15 million monthly active users.
The company increased revenue by 42% to $11.3bn in 2018 while its operating loss decreased from almost $4.1bn to just over $3bn. However, it recorded a net profit of $987m, taking into account sales of its Russia and Southeast Asian businesses during the year.
The all-share divestments means Uber owns a 38% stake in Russia-based Yandex Taxi as part of a deal that closed in February 2018, and the 30% stake it acquired in Singapore-based Grab through a similar transaction the following month was sized at 23.2% by December.
Uber also secured an 18.8% stake in China-based Didi Chuxing when the latter acquired its Uber China subsidiary in 2016, investing $1bn in Uber in the process. That stake is now sized at 15.4%, and Uber also agreed last month to acquire United Arab Emirates-based Careem for $3.1bn.
The offering comes in the wake of about $10.5bn in equity financing for Uber since it was founded in 2009 as UberCab. It initially secured $1.5m in seed funding at a $3.9m valuation from venture capital firms Founder Collective, Lowercase Capital and First Round, and assorted angel investors in 2009 and 2010.
VC firm Benchmark led Uber’s $11m series A round in early 2011, investing alongside existing backers, before Menlo Ventures led a $39m series B round backed by Goldman Sachs, Benchmark Capital, Lowercase Capital and Bezos Expeditions later that year.
Google Ventures, the Alphabet subsidiary now known as GV, invested $258m in the company as part of a $361m series C round in 2013 that included $15m from Benchmark and $88.4m from private equity group TPG, valuing it at $3.5bn.
Uber raised $1.2bn in series D funding from GV, Menlo Ventures, Fidelity Investments, Wellington Management, BlackRock, Summit Partners and Kleiner Perkins Caufield & Byers the following year at an $18.2bn post-money valuation.
Internet group Baidu invested $600m in Uber as part of a $2.8bn series E round also featuring TPG, Fidelity Investments, Wellington Management, Kleiner Perkins Caufield & Byers, Menlo Ventures, New Enterprise Associates (NEA), Qatar Investment Authority, Valiant Capital Partners, Lone Pine Capital and Sequoia Capital that closed in early 2015.
Goldman Sachs Group’s wealth management clients provided $1.6bn in convertible debt financing for the company at roughly the same time.
Times Internet, the online services subsidiary of media group Bennett, Coleman & Co, invested an undisclosed sum shortly after the series E round, and joined software provider Microsoft to provide $1bn for Uber at a $51bn valuation in August the same year.
Investment firm LetterOne supplied a further $200m in early 2016 that was followed by an undisclosed amount from carmaker Toyota and then $3.5bn from Saudi sovereign wealth fund Public Investment Fund (PIF) at a $62.5bn valuation few months later.
Uber received an undisclosed amount from media company Axel Springer in April 2017, before SoftBank’s Vision Fund led a consortium including TPG and Dragoneer that acquired $1.25bn of primary shares at a $68bn valuation and up to $7.2bn of secondary shares at a $48bn valuation, in December.
The company’s most recent funding was a $500m investment by Toyota in August 2018 through a strategic partnership, valuing it at $72bn, though this was subsequently allocated to subsidiary Uber ATG. Its earlier investors also include Citic Bank, Hillhouse Capital, Data Collective, CrunchFund and Innovation Endeavors.
Vision Fund is Uber’s largest investor, with a 16.3% stake, followed by Benchmark (11%), PIF (5.3%) and Alphabet (5.2%). Co-founders Travis Kalanick and Garrett Camp own 8.6% and 6% stakes respectively.
The offering is being overseen by 29 underwriters including Morgan Stanley, Goldman Sachs, Merrill Lynch, Barclays Capital, Citigroup Global Markets, Allen & Company, RBC Capital Markets, SunTrust Robinson Humphrey, Deutsche Bank Securities and HSBC Securities (USA).
SMBC Nikko Securities America, Mizuho Securities USA, Needham & Company, Loop Capital Markets, Siebert Cisneros Shank, Academy Securities, BTIG, Canaccord Genuity, CastleOak Securities and Cowen and Company are also among the underwriters.
The underwriter list is completed by Evercore Group, JMP Securities, Macquarie Capital (USA), Mischler Financial Group, Oppenheimer, Raymond James & Associates, William Blair & Company, Williams Capital Group and TPG Capital.
The filing comes days after Uber’s largest rival in the US, Lyft, floated in a $2.34bn offering that valued it at more than $24bn. However, Lyft’s share price has dropped some 18% since it went public two weeks ago, and that is sure to prove a warning for Uber.
Photo courtesy of Uber Technologies Inc. This article was amended to reflect the re-allocation of the Toyota investment.
