Taxis were always around, but Uber Technologies promised us something different. They promised us taxis within minutes of booking and tracking the car with the help of GPS at any time of the day or night. And you wonder why this became a success? Traditional taxis played the love-hate game with the customers – choosing not to come when most needed, while Uber though has an option to decline, almost never disappointed. Even if it did, there was one too many back-up Uber cars waiting for you.
Short span history
Within no time Uber rose to great heights and then climbed even further to be evaluated as America’s most valued tech start-up. It is currently valued at $41 billion, which is the second most valued VC backed start-up in the world. Launched in 2010, Uber is an app-based transportation firm which is headquartered in San Francisco, California. It operates in various cities in the U.S. and in 50 other countries across the world.
Uber uses a smartphone to receive app requests and sends them to the drivers, who have also been provided with a smartphone by the company. Once the driver accepts the request, the passenger can track their journey.
Can we smell an IPO?
Uber grew manifold as a company and are currently the hottest hopeful for an IPO. Though some from the industry predict that it is about two years away, the CFO’s decision to step down from the role has sparked rumours of an impending IPO happening soon. Brent Callinicos, the former CFO decided to ride out of his role from Uber. Under him Uber rose more than $5 billion in funding and saw its evaluation grow up to $41 billion. Callinicos, who was formerly employed by two stalwart firms Google (GOOG, Financial) and Microsoft (MSFT, Financial), quit due to personal reasons. As the firm hasn’t chosen a new CFO, as per Travis Kalanick, CEO Gautam Gupta would be the acting CFO for the time being.
The company raised $1.8 billion in the end of 2014 through a small group of elite investors. It also raised about $600 million investment from China’s Baidu (BIDU, Financial) and had Goldman Sachs (GS, Financial) offering a convertible debt which would add a few more billions to the firm’s pockets. The convertible deal is actually said to include a coupon that escalates if the company does not go public within four years.
What makes Uber an interesting public offer is that it is valued more than the other companies which are also believed to be on their road to go public – Airbnb ($13 billion) and Snapchat ($10 billion). Also considering the last years IPO performance, it only looks like investors will make a merry if Uber decides to go public. With the market being bullish and the newfound respect for technology firms, we can only expect a warm welcome for the app cum taxi firm.
Stiff competition – Who cares? We rule!
Although other apps are making their inroads into Uber’s market, Uber still seem to be ruling the roost. But the most important thing that’s going Uber’s way is its valuation – $41 billion which is a big number and investors are looking at it hawk eyed. And with the latest reports about, Uber cabs overtaking the traditional yellow cabs in New York, evidences its popularity.
We are famous, else, why controversies?
But no growing company is devoid of controversies and Uber has its own share from violation of laws, rape charge on a driver in India, and bans in countries like The Netherlands, Thailand, and India due to violation of regulations and lack of background checks on drivers. But none of these seems to have deterred the success run of the company much and it only seems to be growing with each passing day.
The company is already rumored to be generating about $2 billion in revenue. In San Francisco alone the firm is believed to be earning about $500 million, which is three times more revenue than the whole of taxi market in the city. If the firm goes for an IPO in the middle of this year, as per many analysts’ prediction, it would be one of the biggest IPOs of 2015 considering the firm is a mix of transportation, mobile application, and real world engineering – a combination which is touted to be extensively beneficial and deadly. For now, let’s wait for the big announcement to get the ball rolling.
