Jan 29, 2018 | Techcelerate Ventures |
Uber Strategy Teardown A data-driven view into Uber's historical and forward-looking strategy Webinar recording will be distributed immediately after 2 The presentation will also be sent to you. Feel free to share with colleagues. The resolution of some slides may be suboptimal due to the webinar software. Those slides will look fine in the presentation that we send you. http://support.citrixonline.com/en_US/Webinar Join the conversation on Twitter 3 @cbinsights @kerrygwu #uberteardown The technology market intelligence platform. CB Insights software lets you predict, discuss and communicate emerging technology trends using data in ways that are beyond human cognition. 4 CBI Councils bring together experienced executives to accelerate their success through the sharing of experience-based insights that inform business decisions and help solve complex strategic, organizational and growth challenges. ABOUT CBI COUNCILS Invitation-only membership network Membership is strictly by invitation only For leaders driving innovation & growth in their organizations Cross-industry membership of senior leaders from corporate strategy, innovation, venture, M&A, digital strategy and technology Curated peer- level groups Membership is limited to SVPs, EVPs, presidents and C-level executives from companies with $1 billion in revenue or more Access to innovators & big thinkers We augment experience- based insights by bringing in and connecting you with entrepreneurs, venture capitalists, academics and big thinkers who provide front-line perspectives and frameworks you can use to navigate the growth challenges you face 7 COMPANIES JOINING APPLY FOR COUNCILS MEMBERSHIP EMAIL firstname.lastname@example.org VISIT www.events.cbinsights.com/councils Kerry Wu @kerrygwu email@example.com 9 About the lead analyst Lead Research Analyst, CB Insights Launched CB Insights' Auto Tech newsletter which reaches 15,000+ entrepreneurs, investors, and industry execs: cbinsights.com/research/autotech Published analysis and research has been featured in The New York Times, The Wall Street Journal, Financial Times, The Economist, and Bloomberg Previously worked as a strategy consultant at Simon-Kucher & Partners Graduate of Columbia University CLICK HERE TO READ THE REPORT Where is all this data from? The CB Insights research portal has all the details in the full 7,000+ word teardown: 10 12 21 28 35 40 Background: History, investors, and valuation Recent developments: New CEO and current challenges Job listing analysis and competitive landscape Divestments and acquisitions The future: Autonomous vehicles and other initiatives 11 Table of Contents Background: HISTORY, INVESTORS, & VALUATION 12 Uber's history 13 Founded: 2009 in San Francisco (as UberCab) CEO: Ryan Graves (2010), Travis Kalanick (2010-17), Dara Khosrowshahi (2017) Services: Transportation network company (TNC) providing ride- hailing, food delivery, and logistics services ("mobility-as-a-service" provider) Total Disclosed Funding: $15.1B, private Select VC Investors: Benchmark Capital, First Round Capital, Lowercase Capital, GV (Google Ventures) Always in the spotlight, for better or for worse Originally launched as a black-car hailing app, Uber has since moved both downmarket for volume and into a number of adjacent logistics services. The company has rapidly rolled out new services within both the US and abroad, generally sticking to its playbook of generous subsidies to boost driver (and rider) growth. 14 Source: CB Insights Trends Uber media mentions over time vs. Airbnb 2012-2017 YTD (9/2017) HOW UBER IS LAUNCHING IN ITS NEWEST CITY, WASHINGTON, DC December 15, 2011 The story so far: It's all about growth, everywhere 15 And on that front, the company has succeeded According to Axios, its latest Q2 2017 figures show continued top-line growth, with gross bookings and adjusted net revenue both roughly doubling year-over-year. While narrowing slightly, losses remain considerable, with Uber having burned roughly $600M in cash since Q1 2017. 16 Source: Company disclosures via Axios. Graphics illustrative and not to scale. Uber select financial disclosures Q2 2017 NET REVENUE (ADJUSTED) Q2 2016 Q2 2017 $800M $1.75B NET LOSS (ADJUSTED) ~$750M $534M CASH ON HAND $6.6B Investors have responded in a big way Especially in the heady startup financing environment of early-to- mid decade, Uber was heralded for the boundless opportunities the company represented. Drawn to this vision and the company's explosive growth, investors flocked to the table. 17 Uber cumulative funding & valuation history 2009-2017 YTD (8/29/2017) $0 $30,000 $60,000 $90,000 $0 $4,000 $8,000 $12,000 $16,000 August 2009 August 2010 August 2011 August 2012 August 2013 August 2014 August 2015 August 2016 Uber Cumulative Funding ($M) Uber China Cumulative Funding ($M) Valuation ($M) $1.5M Seed at $4M valuation $11M Series A at $60M valuation Raises $3.5B from Saudi PIF Raises $1.2B for Uber China (later sold to Didi Chuxing in Q3'16) Raises $1.15B leveraged loan and $1B from Didi Chuxing at $68B valuation $1.2BM Series D at $19.4B valuation Enters unicorn club with $258M Series C; valuation hits $3.85B Cumulative Disclosed Funding ($M) Valuation ($M) And have made Uber the world's most valuable private company Despite not raising any significant disclosed funding in over a year, Uber still sits atop our unicorn tracker as the most valuable private VC- backed startup in the world. Chinese counterpart Didi Chuxing ranks among the few unicorns with a comparable valuation, last pegged at $50B as of Didi's mammoth $5.5B raise in April 2017. 18 Source: CB Insights Unicorn Tracker Investors have flocked from across the spectrum Our Business Social Graph tool helps visualize the wide range of investors that Uber has drawn, including nontraditional players from mutual funds to sovereign wealth funds. Early investor Benchmark is now suing Travis Kalanick for fraud and breach of fiduciary duty. 19 Uber's investors by type Through August 2017 VENTURE CAPITAL & GROWTH EQUITY FIRMS CROSSOVER INVESTORS & FINANCIAL INSTITUTIONS: HEDGE & MUTUAL FUNDS, OTHER ASSET MANAGERS, BANKS, SWFS, ETC. ANGELS CORPORATES & STRATEGICS But to move forward, finesse may be needed Ben Thompson Technology Analyst & Founder, Stratechery September 2016 20 Source: Stratechery "I do worry about this potentially fatal flaw: when and if Uber encounters a problem that requires more than simply hustle and execution, does their executive team have the temperament, strategic mindset, and deep-rooted understanding of their customer base to make decisions that aren't so easily swept under the rug of product-market fit?" Recent developments: NEW CEO & CURRENT CHALLENGES 21 Uber's tumultuous year has turned the company on its head New revelations in 2017 brought long-held issues from misogynism and discrimination to questionable business practices to a head. These issues have resulted in numerous lawsuits, investigations, and departures, culminating in longtime investor Benchmark's forcing out of Travis Kalanick. 22 Source: CB Insights Trends Uber media mentions over time 2012-2017 YTD (9/2017) Background: Investment banker at Allen & Co. (1991-1998) CFO of IAC (1998-2005) CEO of Expedia (2005-2017) Priorities for Uber (per first all-hands meeting): IPO within 18-36 months "Pay the bills" and focus on core businesses "Take big shots" and build for the future Under new management: Uber's new CEO 23 Source: TechCrunch BIO Expedia turnaround experience will come in handy The Expedia team passed on early chances to acquire Booking.com, whose new model for bookings eventually propelled Priceline past Expedia. However, Khosrowshahi committed to long-term fixes, including a shift in business model and rebuilding Expedia's tech platform, which have enabled recent acquisitions. 24 One major challenge: Filling senior leadership gaps 25 Graphic illustrative of senior leadership, not exact reporting structure. On an IPO and fiduciary duty Fred Wilson Co-founder & Managing Partner, Union Square Ventures 26 Source: Business Insider "I agree with Bill Gurley [of Benchmark] on this. [Uber] should be a publicly traded company. When you take money from me, am I getting money from you? You have a responsibility to give me my money back sometime. You can't just say f you. Take the g company public." A CFO will be a top priority 27 Graphic illustrative of senior leadership, not exact reporting structure. JOB LISTING ANALYSIS & COMPETITIVE LANDSCAPE 28 Aside from core operations, autonomous vehicles still a priority Examining Uber's over 1,900 open job listings by team and subteam offers insight into the company's talent priorities. Uber's recruiting efforts for its Advanced Technologies Group (which houses autonomous vehicle development) are apparent, with the unit representing nearly 6% of open listings. 29 Help wanted: Uber's open job listings Distribution of active job listings as of 8/29/2017 North America represents slim majority of total listings Looking at the geographic spread of Uber's roles, over half of the company's open positions are based in North America. Asia represents just under a quarter of its listings, followed by Europe and South America. 30 Uber hiring distribution by continent Distribution of active job listings as of 8/29/2017 Uber continues ramp-up in emerging markets 31 Going head-to-head with local rivals 32 Competitors continue building war chests While Uber itself has stumbled from crisis to crisis in 2017, all of Uber's well-capitalized rivals (both domestically and internationally) have raised significant new financing in 2017. Lyft remains Uber's lone domestic rival of significance, with Uber having passed on chances to merge with or acquire Lyft. 33 War chests: Ride-hailing startups with $1B+ in disclosed funding 2012-2017 YTD (8/29/2017) SoftBank, Didi have invested across space Didi's investment- and partnership-based international strategy (to date) is a stark contrast to Uber's strategy of direct invasions and competition. Meanwhile, SoftBank continues its aggressive empire-building in the transport space, and is now said to be targeting Uber itself in a deal that could range up to $10B. 34 Empire-building: SoftBank & Didi's ride-hailing investments 2017 YTD (8/29/2017) DIVESTMENTS & ACQUISTIONS 35 Divestments have already begun to prune losses In both China and now Russia & Eastern Europe, Uber has struck deals to cease direct operations (and losses) while retaining an economic stake. More such deals could be on the horizon if Uber looks to further draw down its cash burn. 36 Uber divestments: Uber China and Yandex TO YANDEX/MERGED NEWCO: $225M investment Uber Russia operations TO UBER: 36.6% stake in merged NewCo TO UBER: 5.89% preferred stake in Didi (equivalent to 17.7%) TO DIDI CHUXING: Uber China operations Acquisitions focus on AI, autonomous vehicles, mapping Uber's M&A activity has largely focused on adding competencies in frontier areas, such as its acquisition of Geometric Intelligence to serve as a central AI lab. With a relatively late start in the autonomous vehicle (AV) race, the company looked to make up ground by acquiring self-driving truck startup Otto. 37 Uber M&A activity Up to 7/29/2017 Waymo seeking to protect lidar technology Waymo's proprietary self- driving hardware suite includes several novel LiDAR designs, and we used our patent search engine to uncover an application matching its described system. Otto co-founder Anthony Levandowski has been accused of stealing confidential files and trade secrets. 38 Source: CB Insights, Waymo Google/Waymo lidar patent "Long range steerable LIDAR system" Application filing date: 4/6/2015 Application publication date: 10/6/2016 SETTLED LAWSUIT Otto acquisition now threatens AV program, Uber at large Levandowski has been fired from Uber for his role in the lawsuit. The case looks to be proceeding to trial as Uber's requests for arbitration have all been denied. 39 SEBASTIAN THRUN CHRIS URMSON JIAJUN ZHU DAVE FERGUSON BRYAN SALESKY SPUN OUT ACQUIRED ACQUIRED ACTIVE LAWSUIT The Future: AUTONOMOUS VEHICLES & OTHER INTIATIVES 40 "Existential" challenge drove AV urgency Travis Kalanick Co-founder & former CEO, Uber 41 Source: Business Insider "It starts with understanding that the world is going to go self-driving and autonomous So if that's happening, what would happen if we weren't a part of that future? If we weren't part of the autonomy thing? Then the future passes us by, basically, in a very expeditious and efficient way." HOW UBER IS LAUNCHING IN ITS NEWEST CITY, WASHINGTON, DC December 15, 2011 Uber will need to prioritize between "paying bills" & "big shots" 42 CLICK HERE TO READ THE REPORT Looking for more? The CB Insights research portal has all the details in the full 7,000+ word teardown: 43 CBInsights.com @ kerrygwu +1(212)292-3148
A data-driven view into Uber’s historical and forward-looking strategy
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