The major investors making money from Uber's IPO
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Uber’s (UBER) initial public offering is one of the largest in recent U.S. history, marking a milestone for investors, who have weathered the ride-hailing company’s significant ups-and-downs.
Since Travis Kalanick, Garrett Camp, and Oscar Salazar founded Uber in 2009, the San Francisco-based ride-hailing business has raised almost $25 billion from at least 95 investors, including First Round Capital, Sequoia Capital, TPG Growth, Microsoft (MSFT), and PayPal (PYPL). Those investors are poised to win big after Uber goes public on Friday.
On Thursday, the company priced its IPO at $45 per share. At that price, the company raised $8.1 billion at a valuation of $82.4 billion. Uber got off to a bad start on Friday when it traded below its $45 IPO price.
“Uber has been one of the biggest mega-rocket ships of all time,” says Kevin Laws, CEO of AngelList, an online startup investing and jobs platform that Uber used to raise a significant amount of its $1.5 million seed round in 2010. “It was a good company that serves a need, and there are lots of those out there. But a lot of the elements were there: they had a good founding team and a good set of advisers surrounding them, and so it had a lot of the elements that good startup has.”
Uber’s early investor pitch
In Uber’s AngelList pitch to potential early investors, obtained by Yahoo Finance, then-UberCab described its initial pilot phase including 10 drivers in San Francisco managing more than 10 rides on “weekend evenings.” (Uber now deploys 3.9 million drivers across more than 700 cities, according to its S-1 filing, stating that “only 2% of the population in the 63 countries where we operate used our offerings” in fourth-quarter 2018.)
Meanwhile, here is AngelList’s email to investors from 2010, which also helped recruit Uber investors like Shervin Pishevar, then-managing director at Menlo Ventures, which participated in Uber’s Series B.
Once Kalanick became CEO in June 2009, Uber became extremely aggressive in its fundraising, which fueled the company’s rapid global expansion over the next decade across ride-hailing, as well as areas like food delivery with Uber Eats and Uber Freight, an app that matches carriers with shippers. (Uber Eats could reportedly generate at least $1 billion in revenues in 2019, according to Forbes, which performed back-of-the-envelope math based upon Uber’s internal projections.)
“Uber has approached fundraising like it’s approached everything else: an intense desire to do better at everything in order to win,” adds Laws. “Raising more money and doing it so aggressively fits right into Uber's pattern.”