Uber Strategy Teardown

A data-driven view into Ubers historical and forward-looking strategy

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About the lead analyst

Kerry Wu
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, @kerrygwu
and Bloomberg

Previously worked as a strategy consultant at Simon-Kucher &

Partners kwu@cbinsights.com

Graduate of Columbia University

Where is all this data from?
The CB Insights research portal has all the details in
the full 7,000+ word teardown:

CLICK HERE TO READ THE REPORT

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Table of Contents

12 Background: History, investors, and valuation

21 Recent developments: New CEO and current challenges
28 Job listing analysis and competitive landscape
35 Divestments and acquisitions
40 The future: Autonomous vehicles and other initiatives

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Background:
HISTORY, INVESTORS, & VALUATION

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Ubers history

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)

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Uber media mentions over time vs. Airbnb Always in the spotlight,
2012-2017 YTD (9/2017) 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.
Source: CB Insights Trends 14
The story so far: Its all about growth, everywhere
HOW UBER IS LAUNCHING IN ITS
NEWEST CITY, WASHINGTON, DC
December 15, 2011

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 Uber select financial disclosures And on that front, the
Q2 2017 company has succeeded
Q2 2016 Q2 2017

According to Axios, its

NET REVENUE latest Q2 2017 figures
$800M $1.75B show continued top-line
(ADJUSTED)
growth, with gross
bookings and adjusted
net revenue both roughly
doubling year-over-year.
NET LOSS While narrowing slightly,
~$750M $534M
(ADJUSTED)
losses remain
considerable, with Uber
having burned roughly
$600M in cash since Q1
2017.
CASH ON HAND $6.6B

Source: Company disclosures via Axios. Graphics illustrative and not to scale. 16
 Uber cumulative funding & valuation history Investors have
2009-2017 YTD (8/29/2017) responded in a big way
Raises $1.15B leveraged
Cumulative Disclosed Funding ($M) loan and $1B from Didi Valuation ($M)
Chuxing at $68B valuation
$16,000
Especially in the heady
$90,000
Raises $3.5B
startup financing
from Saudi PIF
environment of early-to-
$12,000
mid decade, Uber was
Raises $1.2B for
Uber China
(later sold to Didi $60,000
heralded for the
Chuxing in Q3'16)
boundless opportunities
$8,000
the company represented.

$1.2BM Series D at $30,000

Drawn to this vision and
$4,000 $19.4B valuation the companys explosive
Enters unicorn club growth, investors flocked
$1.5M Seed at $4M $11M Series A at with $258M Series C;
valuation $60M valuation valuation hits $3.85B
to the table.
$0 $0
August August August August August August August August
2009 2010 2011 2012 2013 2014 2015 2016

Uber Cumulative Funding ($M) Uber China Cumulative Funding ($M) Valuation ($M)

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 And have made Uber the
worlds 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 Didis
mammoth $5.5B raise in
April 2017.
Source: CB Insights Unicorn Tracker 18
Ubers investors by type Investors have flocked
Through August 2017
CROSSOVER INVESTORS & FINANCIAL INSTITUTIONS:
from across the spectrum
HEDGE & MUTUAL FUNDS, OTHER ASSET MANAGERS, BANKS, SWFS, ETC.

Our Business Social Graph

tool helps visualize the
VENTURE CAPITAL &
GROWTH EQUITY FIRMS
CORPORATES &
wide range of investors
STRATEGICS 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.
ANGELS

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But to move forward, finesse may be needed

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 arent so easily
swept under the rug of product-market fit?
Ben Thompson
Technology Analyst & Founder, Stratechery
September 2016

Source: Stratechery 20
Recent developments:
NEW CEO & CURRENT CHALLENGES

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Uber media mentions over time Ubers tumultuous year
2012-2017 YTD (9/2017) 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 Benchmarks
forcing out of Travis
Kalanick.

Source: CB Insights Trends 22

Under new management: Ubers new CEO

BIO

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

Source: TechCrunch 23
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 Expedias tech
platform, which have
enabled recent acquisitions.

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One major challenge: Filling senior leadership gaps

Graphic illustrative of senior leadership, not exact reporting structure. 25

On an IPO and fiduciary duty

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 cant just say f you. Take the
g company public.
Fred Wilson
Co-founder & Managing Partner, Union Square Ventures

Source: Business Insider 26

A CFO will be a top priority

Graphic illustrative of senior leadership, not exact reporting structure. 27

JOB LISTING ANALYSIS & COMPETITIVE
LANDSCAPE

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Help wanted: Ubers open job listings Aside from core
Distribution of active job listings as of 8/29/2017 operations, autonomous
vehicles still a priority

Examining Ubers over

1,900 open job listings by
team and subteam offers
insight into the
companys talent
priorities.

Ubers 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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Uber hiring distribution by continent North America represents
Distribution of active job listings as of 8/29/2017 slim majority of total
listings

Looking at the
geographic spread of
Ubers roles, over half of
the companys 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 continues ramp-up in emerging markets

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Going head-to-head with local rivals

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War chests: Ride-hailing startups with $1B+ in disclosed funding Competitors continue
2012-2017 YTD (8/29/2017) building war chests

While Uber itself has

stumbled from crisis to
crisis in 2017, all of
Ubers well-capitalized
rivals (both domestically
and internationally) have
raised significant new
financing in 2017.

Lyft remains Ubers lone

domestic rival of
significance, with Uber
having passed on
chances to merge with or
acquire Lyft.

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Empire-building: SoftBank & Didis ride-hailing investments SoftBank, Didi have
2017 YTD (8/29/2017) invested across space

Didis investment- and

partnership-based
international strategy (to
date) is a stark contrast to
Ubers 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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DIVESTMENTS & ACQUISTIONS

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Uber divestments: Uber China and Yandex Divestments have already
begun to prune losses

TO YANDEX/MERGED NEWCO:
$225M investment In both China and now
Uber Russia operations Russia & Eastern Europe,
Uber has struck deals to
cease direct operations
(and losses) while retaining
TO UBER: an economic stake.
36.6% stake in merged NewCo

More such deals could be

TO UBER:
5.89% preferred stake in Didi (equivalent to 17.7%) on the horizon if Uber looks
to further draw down its
cash burn.

TO DIDI CHUXING:
Uber China operations

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Uber M&A activity Acquisitions focus on AI,
Up to 7/29/2017 autonomous vehicles,
mapping

Ubers 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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Google/Waymo lidar patent Waymo seeking to
Long range steerable LIDAR system protect lidar technology
Application filing date: 4/6/2015
Application publication date: 10/6/2016

Waymos 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.

Source: CB Insights, Waymo 38

 Otto acquisition now
threatens AV program,
Uber at large
JIAJUN ZHU
DAVE FERGUSON Levandowski has been
fired from Uber for his
role in the lawsuit.
SEBASTIAN BRYAN ACTIVE CHRIS SETTLED
THRUN SALESKY LAWSUIT URMSON LAWSUIT
The case looks to be
proceeding to trial as
Ubers requests for
arbitration have all been
denied.

SPUN OUT ACQUIRED ACQUIRED

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The Future:
AUTONOMOUS VEHICLES & OTHER INTIATIVES

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Existential challenge drove AV urgency

It starts with understanding that the world is

going to go self-driving and autonomous So
if thats happening, what would happen if we
werent a part of that future? If we werent
part of the autonomy thing? Then the future
passes us by, basically, in a very expeditious
and efficient way.
Travis Kalanick
Co-founder & former CEO, Uber

Source: Business Insider 41

Uber will need to prioritize between paying bills & big shots

HOW UBER IS LAUNCHING IN ITS

NEWEST CITY, WASHINGTON, DC
December 15, 2011

42
Looking for more?
The CB Insights research portal has all the details in
the full 7,000+ word teardown:

CLICK HERE TO READ THE REPORT

43
CBInsights.com
@ kerrygwu

+1(212)292-3148