An anatomy of Uber's $10.7bn spending spree since its inception
According to a Bloomberg analysis, Uber Technologies, since its inception in 2009, has spent $10.7 billion of the $17.3 billion it raised from investors. For an American tech company that's less than a decade old, burning through two-thirds of funds raised is unprecedented. However, unlike a public company, Uber doesn't need to disclose its financial results, thus making it difficult to pin-point its expenditure.
But, where did all the money go?
There is no denying that Uber has lost majority of the money in establishing a market and then staying on top of it. In essence, from autonomous cars to driver subsidies and legal battles to insurance costs, all that encapsulate Uber's spending spree. Notably, Uber's profit margins are narrow and the company is yet to turn profitable.
How Uber stacks up with other tech companies
In 2017, after grossing $37 billion revenue and paying off the drivers, Uber reported a net revenue of $7.4 billion. Interestingly, Uber's losses in 2017 were $4.5 billion. At Uber's current evaluation of $54 billion, no other known tech company (Facebook, Google, Amazon), reported such high losses when their market capitalization was close to that of Uber's.
Why investors back a 'corporate anomaly' like Uber?
What urges investors to back Uber, is an unmatched trajectory of sales growth. Uber's revenue reached $2.3 billion in Q4 2017, with a strong annual growth rate of 90 percent. Further, as compared to an average tech company in the US with a market cap close to that of Uber's, the ride-hailing company delivered triple the sales growth last year. Now, that is remarkable!