The year 2019 is going to be more exciting in terms of Initial Public Offering (IPO). As per the earlier estimation, Uber IPO – expected this year – could value the company as much as $120 billion. Now, some of the recent developments indicate that the ride-hailing giant could well fall short of market expectations, and would have to settle for little less than $100 billion in valuation.
Despite the shortfall, Uber’s IPO could be the largest in the history topping Alibaba, which raised $25 billion through IPO. Most likely Uber will offer anything over 25% of its shares in the public, which will eventually make the 10-year-old startup have one more feather of biggest ever IPO launch in its crown.
Uber’s $120 billion targeted valuation is partly based on earlier undisclosed projections the ride-hailing giant gave to creditors in March last year. The revenue projection portrayed a rosy picture to its creditors as the company claimed to double its revenue to $14.7 billion in 2019 from its 2017 level. The company further spiced up the projected scenario by estimating that the losses before taxes, interest, and non-cash items like depreciation and stock compensation will fall down to $500 million in 2019, shrinking drastically from the estimated $1.7 billion in 2018.
However, considering the falling stock market slump in the recent weeks, many market analysts believe that it’s going to be a bumpy ride to $120 billion valuation for Uber, and the world’s most valued startup could end up settling with $90 billion in valuation.
To win the creditors’ confidence, in October, Uber revealed some more figures that explain the company’s market position in various geographies. Australia & New Zealand remains the most dominant market for Uber with 90% market share, followed by Latin America and Europe with 85% and 75% market share, respectively. India and MEA regions emerged as the only markets where Uber strengthened its market presence, as the share rise to 60%, up from 55%, and to 55% from 50%, respectively, in March 2017.
As of June 2018, Uber’s has 73 million monthly riders. The company has also completed 10 billion rides, globally. By peeping deep into the data, it seems Uber has done a commendable job here. Nearly 70% of rides it handled in 2017 were taken by the repeat customers.
On the flip side, the increasing regulatory problem in the US – the country where Uber enjoys 70% of the market share – and many other countries is the biggest cause of concern. Uber also accepted that bad publicity in 2017 done the significant damages as well, which resulted in the loss of market share and caused the slow growth of the business.
Uber is also banking on the ‘high-capacity’ rides for future growth, which allow more number of people travelling together than a car. However, whether all such figures and future plans could excite people and win their confidence, only the upcoming Uber IPO would tell.