Reconstructing Uber’s Uber Financials
Like many of people in the tech community, I’ve been following Uber with a mix of awe, horror, and admittedly, jealousy. How exactly is it doing? How is it worth $40B+? What brand of pomade does Travis Kalanick put in his hair? I took it upon myself this week to at least try to solve the first question (the rest will come in the coming weeks) using publicly available (both “leaked” and “released”) data to reconstruct Uber’s topline revenue.
What makes me uniquely qualified to do this? Well, a long long ago, in a past life that I no longer publicly acknowledge; in case I lose my nerd cred, I was a junior investment banking analyst, working for this guy. . . plus I got an “A” in Intro to Algebra in high school.
This is what we know as “facts”:
- December 2013, the top 5 cities (NYC, SF, Chicago, DC, LA) generated ~$75M in GROSS revenue (Side Note: The speed in which LA ramped up from nothing in the beginning of the December to almost the size of NYC by end of the month is nothing short of amazing) (source: Business Insider)
- From NYE 2012 to NYE 2013, its year over year revenue grew by 369% (source: Business Insider)
- NYE 2013 revenue, top 5 cities represent 56% of revenue (source: Business insider)
- From January 2014 to June 2014, its monthly revenue doubled (source: WSJ)
- Uber itself was giving projections to potential investors at the latest $40B round a GROSS revenue of “$10B run-rate” by December 2015 (source: Henry Blodget)
- Between January 2014 to Dec 2014 Uber’s monthly revenue tripled again (source: Henry Blodget)
From those numbers can triangulate/guestimate the following
- Dec 2013 GROSS revenue is between $75M and $135M (probably closer to $75M) . . . so lets go with $100MM
- Dec 2012 GROSS revenue is ~$27M
- June 2014 GROSS revenue is ~$200M
- December 2015 Gross revenue is ~$900M
Using linear extrapolation (because I’m lazy), here is what I came up with for Uber’s net revenue.
(Note to mutual fund and PE guys, marketplaces are valued based on NET revenue not GROSS revenue, eBay set the accounting standard all the way back in 1999. Groupon’s shenanigans on this topic caused it to re-price its IPO multiple times.)
OK, that was a little hard to read, but data rich. Let's try again.
Much better. So what do we know?
- All the numbers that were leaked at different times ended up being remarkably consistent, which means there were probably directionally correct
- I'm guessing I'm +- 20% on my projections
- 2013 Uber is the size of a single category in eBay . . . big f'ing deal; 2014 Uber is an interesting company; 2015 Uber is an absolute gorilla
- Uber must be supremely confident and riding a lot on its 2015 numbers. When you are projecting 200% annual growth at this scale, missing a month early in the year, will make you miss the year by a long shot . . . since we are in March already, Uber probably knows whether its on track for the "$10B" gross run rate target already
- I'm going to have to sleep on what other fun analysis I can do with these numbers . . . more to come!