More details have been released about what is predicted to be this year’s biggest IPO, the Uber IPO. The ride-hailing giant officially unveiled its finances in a prospectus on Thursday.
The offering, which could potentially value the company at close to (or over) a $100 Billion, is expected to a breakthrough in the global financial market and establish the company’s image as one of the leading tech firms.
In its IPO filing, the company made a couple of revelations – some enticing and some slightly discouraging. These are:
- The company revealed that it raked in a loss of $1.8 Billion in 2018, while its loss in 2017 was $4 Billion.
- The Uber platform’s monthly users (including both the raid hailing as well as the food delivery service) was 91 million in 2018, up 34% from 2017. User growth rose 51%, but growth was still slow.
- Uber’s spending was $14.3 Billion in 2018, up 19% from 2017.
- The company now operates in more than 63 countries and 700 cities around the world.
- Uber acknowledged a toll of the challenges it faced in 2017, such as the #DeleteUber media campaign, the perception of it being a toxic workplace as well as ongoing investigations by the DoJ and foreign government agencies over its past business practices.
- The company said that it intends to award cash bonuses to more than 1.1 million drivers in the US, which would range from $100 to $10,000 based on the number of trips they have completed.
- The IPO underwriters include Morgan Stanley & Co. LLC, Goldman Sachs & Co. LLC, Merrill Lynch, Pierce, Fenner & Smith Inc., Allen & Co. LLC, RBC Capital Markets LLC, and many more.
- The company’s co-founders Travis Kalanick and Garrett Camp, along with early employee Ryan Graves, may all end up owning 10-figure stakes in the company.
- In a rather shocking revelation, the company also said that it may not become profitable any time soon.
“We expect our operating expenses to increase significantly in the foreseeable future, and we may not achieve profitability,” it said.
The prospectus also enlisted a litany of risk factors. These range from its huge spending on things like drivers, “unproven” revenue lines, and the danger of unrealized cost savings from its Careem acquisition, to the fact that Uber Eats (Uber’s food delivery business) makes a loss on some of the partnerships it has with big chains like McDonald’s.
“We will need to generate and sustain increased revenue levels and decrease proportionate expenses in future periods to achieve profitability in many of our largest markets, including in the United States, and even if we do, we may not be able to maintain or increase profitability,” Uber said.
As mentioned, Uber will likely be the biggest IPO of 2019. That being the case, it will probably serve as the yardstick against which to measure this year’s IPO bonanza, which will see many tech firms like Pinterest and Airbnb also go public.