Uber IPO: Investors Could Earn a 100%+ Return

Uber IPOThere is one hot IPO to watch in the next 18 to 24 months—Uber Technologies, Inc. The company revolutionized the transportation services business by connecting passengers and drivers via smartphone apps. With a solid growth record and strong potential, Uber’s IPO is definitely worth watching.

Solid Business Model, Strong Growth

Uber’s business model is a simple yet solid one: as the middleman who connects drivers with passengers, Uber keeps 20% of every fare.

With people using its service in 300 cities in 58 countries, Uber is generating big money. The company’s CEO Travis Kalanick said last year that the company’s revenue was doubling every six months.

Uber has grown its business tremendously over the past several years. According to a presentation for potential investors in Uber’s Series F financing, bookings in 2013 totaled $687.8 million. By 2014, it reached $2.91 billion. (Source: Reuters, last accessed August 25, 2015.)

Uber’s strong momentum is expected to continue into the future. According to the presentation, the company’s global bookings are expected to triple to $10.84 billion in 2015 and reach $26.12 billion the year after.

At this pace, the company’s revenue would also pick up. Reuters recently calculated that Uber’s revenue in 2015 could reach $2.0 billion. That would be huge revenue among not just privately-held companies but also public ones.

Uber IPO Would Further Build its Business

According to this presentation which was prepared by Chinese bankers with input from Uber, the company could go public in the next 18 to 24 months.

Uber’s IPO date has not been confirmed. The company’s spokeswoman declined to comment on “rumor and speculation.”

The neat thing is, if Uber does go ahead with its IPO, it might be able to get even more customers.

You see, Uber has used social media extensively to market itself to potential passengers and drivers. If Uber goes public, the company would get a lot more attention from many other media outlets, which would be conducive to increasing its brand awareness.

$50.0 Billion Valuation

Uber is not your average technology startup. It is mega.

In its most recent round of funding, the company raised $1.0 billion, which brought Uber’s total funding to more than $5.0 billion. Investors involved in that round included Microsoft Corporation (NASDAQ:MSFT), and India’s Bennett, Coleman & Co. (Source: The Wall Street Journal, last accessed August 25, 2015.)

What was Uber’s valuation? A whopping $50.0 billion.

With this kind of valuation, Uber is on its way to become the most valuable venture-backed startup in history. The only company that managed to grow to such a scale was Facebook Inc. (NASDAQ:FB), which had a $50.0 billion valuation before going public.

The company has received some backing up from China as well. The presentation found by Reuters suggested that two Chinese state-owned companies—China Life Insurance Co. and China Taiping Insurance—had invested in Uber in the past year. China Life Insurance has confirmed its investment in Uber, while China Taiping Insurance declined to comment.

Future? Uber is the Future

Sure, the company has experienced some disputes with taxi companies and also had some regulatory controversies. But you have to admit that it has revolutionized the transportation service industry. It has made transportation much more efficient.

And the company is still innovating. Right now, Uber is testing a bus-style service called “Smart Routes” in San Francisco. Moreover, it has partnered with Carnegie Mellon University to found the Uber Advanced Technology Center, a new facility in Pittsburgh focused on the research and development of driverless cars.

With so much being done, and so much yet to come, Uber’s upcoming IPO would be an exciting one to watch.

Also Read: Uber IPO: Rumors Fly As Chinese Firm Invests $1.0 Billion