Xiaomi is no more world’s most valuable tech startup, as Uber has surpassed them.
With a valuation of $51 billion after latest round of funding from Microsoft and Times Internet, 5 year old Uber has taken less time compared with Facebook to cross the magical figure of $50 billion.
Also, it would be the first instance when rivals Google, Amazon and Microsoft are all investors of the same startup: Uber.
As per Wall Street Journal, Uber had filed the papers in May to authorize this latest round of funding worth $1 billion, which will take total funding to $5 billion, with revenues of $400 million (in 2014). Uber has assured their investors that their revenues will cross $2 billion mark in 2015.
Both Microsoft and Times Internet have refused to share details about this news. An Uber spokesperson said, “We aren’t commenting on additional speculation.”
As per reports, this new round of funding would be used to enhance their technology and to expand in non-US markets, which India is a very important part. Infact, India is the second largest market for Uber outside US.
We had recently shared that Uber will invest $1 billion in India to expand their operations.
Magical Mark of $50 billion
Only two venture backed startups have been able to cross $50 billion mark till date: Facebook and Uber. Facebook took 7 years to cross this mark, whereasUber took only 5 years.
However, when Facebook’s valuation crossed $50 billion in 2011, they had annual revenues of $2 billion, whereas Uber had revenues of $400 million last year. Right now, Facebook is valued at $267 billion.
After this current round of funding is finalized, Uber would be worth 120 times of it’s revenues; compared with Facebook which was valued at 25 times of its revenues in 2011.
Positive Market Sentiments
Nasdaq Composite Index, which is dominated by listings from tech startups is currently twice the level of 2011, when Facebook become the first VC backed tech startup to cross $50 billion mark. This actually shows the positive market sentiments right now.
Additionally, traditional investors, who shied away from tech startups are now opening up and pouring in huge venture funds to scale up operations and book greater profits.
As per WSJ, mutual funds, hedge funds, sovereign-wealth funds and other such investors are now quite comfortable with tech startups, which was not the case earlier. Maybe this is the reason that 2015 saw 107 companies raising more than $100 million VC funds, compared to 56 in 2014 (and 4 months still remain in 2015). Last year, there were 77 billion dollar startups, which have now increased to 104. Uber tops this list as of now.
It is indeed strange that despite facing so many legal issues in different countries (including India, where it is banned in some states), Uber is continuing to grow, surpassing all previous benchmarks.