Business Liquidity Startups

Morning Report: Uber’s Value Drops On Private Markets As Mistakes Mount

Morning Report: Uber’s valuation is falling on the private market. Its mistakes, controversies, and failings are taking a toll, despite its rapid growth and progress towards profitability.

Uber’s 2017 has been rocked with allegations of a deeply sexist culture, executive departures, and a lawsuit from an Alphabet company claiming extensive IP theft. And that’s the short list: Hell, Greyball, and the company’s CEO himself have also dogged the company this year.

And what happens when a rapidly growing private company is in the midst of a period so difficult that it decides to release financial performance showing an adjusted loss of $2.8 billion for the prior year? Its value drops.

The Information reported this morning that Uber’s share price on private markets has fallen. According to The Information, Uber’s share value among private investors has fallen around 15 percent, a per-share price that values the ride-hailing company at “around $50 billion.”

Getting granular, this is how it breaks down:

At the beginning of this year, buyers were bidding in the low- to mid-40s per share, equivalent to a valuation closer to $60 billion, the broker said. More recently, potential buyers and sellers have been seeking to do deals in the mid- to high-30s per share, or a valuation of around $50 billion. Uber’s last financing round at $48.77 per share valued it at around $68 billion, but secondary market buyers have generally not been willing to pay that price, even before the recent controversy.

That Uber’s value was falling before its recent spate of bad is perhaps not surprising in the wake of its retreat in the Chinese market and continued losses.

The valuation response mechanism will always be faster for public companies than private firms. But even Uber, which has shown a willingness to exercise taught grip on its equity, is not immune from an old fashioned repricing.

Homework: Does Uber see a material price decline in value the next time it raises external money or is the current dip merely a gulley?

From the Crunchbase Daily:

Babylon Health raises $60M for AI doctor app

  • Babylon Health, a developer of artificial intelligence-enabled apps for healthcare, has raised $60 million in new funding, bringing total investment to $85 million. The London-based company has developed an AI-enabled symptom checker and later this year plans to begin offering clinicians diagnosis services.

Square said to acquire Yik Yak team

  • What happens to social networks when people stop using them? Apparently, they don’t retain much value. The latest case in point is Yik Yak, a social network for anonymous posting that raised more than $70 million in venture funding in 2014 before seeing user rates decline. Bloomberg reports that payments processor Square paid less than $3 million to acquire a team of engineers from the Atlanta-based company.

Rubrik reportedly raising up to $200M

  • Rubrik, a data backup company that emerged from stealth in 2015, is in the process of raising between $150 million and $200 million at a valuation of $1 billion, according to a TechCrunch report citing unnamed sources. To date, the Silicon Valley company has raised $112 million.

All the Q1 VC news in one post

  • For the past few weeks, Crunchbase has been publishing findings for venture funding in the first quarter of 2017 one article at a time. Now, we’ve aggregated those pieces in one place, along with brief summaries and charts, to provide an overview of global and U.S. funding totals, female founder trends, and investment activity for key sectors.
Featured Image via Flickr userTechCrunch under CC BY 2.0. Image has been cropped.

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