Uber Strategy Teardown
A data-driven view into Uber's historical and forward-looking strategy
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Kerry Wu
@kerrygwu
kwu@cbinsights.com
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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:
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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
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Table of Contents
Background:
HISTORY, INVESTORS, & VALUATION
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Uber's history
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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.
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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
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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.
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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.
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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.
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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.
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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
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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
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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.
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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
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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.
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One major challenge: Filling senior leadership gaps
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Graphic illustrative of senior leadership, not exact reporting structure.
On an IPO and fiduciary duty
Fred Wilson
Co-founder & Managing Partner, Union Square Ventures
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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
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Graphic illustrative of senior leadership, not exact reporting structure.
JOB LISTING ANALYSIS & COMPETITIVE
LANDSCAPE
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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.
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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.
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Uber hiring distribution by continent
Distribution of active job listings as of 8/29/2017
Uber continues ramp-up in emerging markets
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Going head-to-head with local rivals
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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.
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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.
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Empire-building: SoftBank & Didi's ride-hailing investments
2017 YTD (8/29/2017)
DIVESTMENTS & ACQUISTIONS
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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.
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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.
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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.
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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.
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SEBASTIAN
THRUN
CHRIS
URMSON
JIAJUN ZHU
DAVE FERGUSON
BRYAN
SALESKY
SPUN OUT
ACQUIRED
ACQUIRED
ACTIVE
LAWSUIT
The Future:
AUTONOMOUS VEHICLES & OTHER INTIATIVES
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"Existential" challenge drove AV urgency
Travis Kalanick
Co-founder & former CEO, Uber
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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"
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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