Most expensive mergers and acquisitions happen in tech space. Microsoft has proven it yet again.
In 2009, a year after the Great Recession, a disruptive ride-sharing app was born. In Silicon Valley, no less. Five years after, this disruptor morphed into a unicorn valued at $40 billion. (For those unfamiliar with the term, a start-up company with a valuation of $1 billion and above is known as a unicorn.) In 2015, the valuation rose to $51 billion. And then last year, the breakthrough app became the world’s most valuable startup at $62.5 billion. I speak of the ubiquitous car-hailing app used in over 450 cities: Uber.
Founded by two successful tech company owners, Garrett Camp and Travis Kalanick, the taxi-killing transportation network company, Uber, has reached this exorbitant valuation in just seven years.
Could Uber be possibly worth this much?
Harvard Business Review tries to explain. Analysts said that Uber has made a breakthrough innovation by offering a cheaper and more accessible transportation service that's unheard of years ago. By downloading the app, anyone who owns a car can get compensation when a commuter books through the app. The idea was simple yet novel upon its first release. No surprise why it has gained traction.
Now Uber is growing at a remarkable scale. WSJ reported that the company adds 20,000 drivers every month. All these only prove the huge value of Uber to consumers.
But while Uber is transparent about its number of users and growth potential, its books are a top secret. At this moment, what we know is that it has received a total of $11.46 billion in funding.
Despite its success, the startup company isn't without fierce competition. (If you have a brilliant idea, expect to be imitated.) China has it banned on account of current ride-hailing apps available locally, the biggest of them being Didi.
In its own soil, Uber also has to contend with Lyft, another ride-sharing app much favored recently by the public.
Is Uber's value set in stone? Or is it another overpriced, underperforming app majority of the population will delete soon? I guess, only time can tell.