It was a pleasure to write this piece for Georgian Angel Network!
Uber benefitted from visionary angel investors in 2010, who were rewarded with
Whether you’re an angel or entrepreneur, this article will inspire you.
Angel investors see the vision before it takes shape. They feel the passion, understand the dream, relish innovation and are inspired by bold, new technologies that seek to thrust a stagnant industry through a major disruption. Such disruption has the power to change society’s thinking, add to our everyday lexicon and fill a need with such ease, we wonder how we ever got along before its advent.
Angel investors reach for their chequebooks long before the masses have the opportunity to storm the bandwagon. It’s risky, but sometimes, the payoff is extraordinary. On Friday, May 10th, 2019, Uber Technologies, Inc. had its initial public offering (IPO) (NYSE: UBER). Angel investors were rewarded handsomely, as according to The Wall Street Journal, “In 2010, 18 funds and individuals valued Uber at $5.4 million. Today, that same company is worth $82 billion” (*Uber is valued at approximately $76.5 billion at the time of writing this article). Such astonishing returns are not guaranteed, but Georgian Angel Network’s Managing Director, Michael Badham, reminds angel investors that- when the risk pays off- patience is rewarded. He imagines that a number of prospective investors would have refrained from investing in Uber; achieving success in such a highly regulated industry would have been difficult to fathom. By the time the opportunity to liquidate an angel investment presents itself (after witnessing a company’s growth, the addition of services and pivoting, when necessary), angel investors have experienced quite the ride.
Stop on red… or should you?
According to Fast Company, “New shareholders will have [to] contend with how Uber becomes profitable–and if it can.” Though Uber has completed 23 rounds of funding, including Series A funding in 2011 to Series G late-stage funding in 2016, Uber remains committed to their vision as they continue to provide 17 million trips per day across six continents. In a letter to the public, Uber’s CEO, Dara Khosrowshahi stated, “…we will not shy away from making short-term financial sacrifices where we see clear long-term benefits.” Still, profitability (or lack thereof) is something investors consider (however, it is not uncommon for a tech company to go public before becoming profitable). In Uber’s case, the three platforms through which the offer is structured (via Personal Mobility [includes: Ridesharing, New Mobility, Uber for Business and Uber Health], Uber Eats and Uber Freight [includes: Uber Freight for Carriers and Uber Freight Platform for Shippers]) encourages the examination of the company’s potential to pivot, expand within, or reinvent different industries.
Advance on green
When considering what’s next for Uber, we must ask ourselves: do Uber’s three platforms exhibit the same entrepreneurial daring that inspired angel investors to invest in Uber in 2010? Now that Uber is a public company, are we interested in joining them for the ride?
When contemplating these questions, potential investors should be aware that Uber is developing other fascinating platforms, including driverless cars and Uber Air.
Autonomous vehicles
Drivers are Uber’s biggest cost, but autonomous vehicles could be more than a decade away. Uber has revamped their commitment to safety after halting testing for nine months and shutting operations down in Arizona last year because a woman was tragically struck and killed by an Uber vehicle that was in autonomous mode (a driver was in the car, but failed to prevent the accident).
In order to continue advancing this initiative, “Uber has poured money into the Advanced Technologies Group’s work—nearly $1.1 billion since 2016, including $457 million in 2018.” When it comes to developing driverless cars, Uber is focused on securing their spot in the driver’s seat.
From streets to skies
Uber is planning to launch Uber Elevate (Uber Air) in 2023, which will offer aerial ridesharing between cities and suburbs. Their goal is to “launch fleets of small, electric VTOL (vertical takeoff and landing) aircraft in Dallas, Los Angeles, and a to-be-announced international market.”
Investors and the public will scrutinize the future of Uber, but it’s clear that when it comes to this tech giant, the sky really is the limit.
References available upon request.
Author’s disclosure/conflict of interest: None. Please note that this article is for informational purposes only.