Private Market Insights: Focus on Ridesharing & The Future Of Mobility
July 18, 2018 | Blog

Private Market Insights: Focus on Ridesharing & The Future Of Mobility

As part of our “feet on the street” approach to research, this week we are in Aspen, CO attending Fortune’s Brainstorm Tech Conference. Below are our highlights

Uber focusing on a road to profitability: Despite lacking a chief financial officer and the recent resignation of its top human resources official, CEO Dara Khosrowshahi seemed confident about the business and path to an IPO. Khosrowshahi reiterated that CFO search remains “work in progress”, and the company remains on track to go public in 2019. Khosrowshahi is focusing on generating enough cash from its core business so Uber can self-fund its operations. Uber also appears satisfied with its efforts to develop the self-driving car technology, preferring to keep R&D efforts in-house, at least over the next couple of years. On international expansion, Khosrowshahi seemed comfortable with Uber’s geographic footprint outside of China, Southeast Asia and Russia and hinted that the company does not have any deals in sight into fiercely competitive markets like India.

Our Take: Dara’s record at the end of the first year as the CEO of Uber is filled with significant business and funding milestones. But, recent staff departures and C-level criticisms continue to highlight the challenge of reforming company culture. Despite Khosrowshahi’s confidence that Uber will go public next year, we believe that a 1H:2020 IPO feels realistic right now.

Lyft’s future plans focus on subscription plans, e-bikes, and scooters: Lyft President John Zimmer emphatically denied media reports that Lyft’s market share growth slowed from 2017 into 2018. In fact, he said the company’s U.S. market share has continued to accelerate this year with Lyft controlling more than 50 percent of the market in several cities. Zimmer added that Lyft has a significant opportunity to provide consumers with last-mile mobility options, including bikes and scooters, which could also significantly reduce traffic in cities. The company recently acquired bicycle rental firm Citi Bike in New York.

Our Take: Lyft has executed very well in the shadows of Uber’s recent miseries. Having raised $3 billion over the past 12 months, Lyft can significantly build on that momentum. However, we are worried that a step up in cash burn could push Lyft’s IPO well beyond 2019.

Grab plans to become a provider of financial services and payments to consumers: Grab co-founder Hooi Ling Tan touted her company growth prospects in Southeast Asia (which reminded her of China decade ago): 640 million consumers, with just 240 million of them connected to the Internet. Today, Grab, which recently acquired Uber’s operations in the region, offers ridesharing, e-bikes, motor-bikes, scooters along with food and grocery delivery. Since Southeast Asia is more fragmented than China and the United States, Grab can aggregate services beyond what its ridesharing counterparts offer today. Tan said Grab will expand beyond transportation and mobility into financial services and payments to consumers and merchants. Tan said they are working very closely with regulators and feels confident they will approve the Uber deal. Under the terms of the agreement, Uber will own a 27.5 percent stake in Grab, along with a board seat for Khosrowshahi.

Our Take: The Uber deal has unlocked several growth opportunities for Grab. The company boasts an enviable list of investors, including Toyota, Softbank, Didi Chuxing, and now Uber. With more than $5.5 billion in venture capital, Grab is well positioned to grab significant market share in the global ridesharing industry over the next couple of years.

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DISCLAIMER: This report does not contain a complete analysis of every material fact regarding any issuer, industry, or security. The opinions expressed in this report reflect our judgment at this date and are subject to change. The information contained in this report has been obtained from sources we consider to be reliable; however, we cannot guarantee the accuracy of all such information.

Any securities offered are offered by SharesPost Financial Corporation, a member of FINRA/SIPC. SharesPost Financial Corporation and SP Investments Management are wholly owned subsidiaries of SharesPost Inc. Certain affiliates of these entities may act as principals in such transactions.

Investing in private company securities is not suitable for all investors. An investment in private company securities is highly speculative and involves a high degree of risk. It should only be considered as a long-term investment. You must be prepared to withstand a total loss of your investment. Private company securities are also highly illiquid, and there is no guarantee that a market will develop for such securities. Each investment also carries its own specific risks. You should complete your own independent due diligence regarding the investment, including obtaining additional company information, opinions, financial projections, and legal or other investment advice.

Investing in private company securities is appropriate only for those investors who can tolerate a high degree of risk and do not require a liquid investment.

SharesPost, the SharesPost logo, My SharesPost, the SharesPost Index, SharesPost Investment Management, the SharesPost 100 Fund, and the SharesPost 100 List are all registered trademarks of SharesPost Inc. All other trademarks are the property of their respective owners.

Copyright © SharesPost, Inc. 2019. All rights reserved.

Alejandro Ortiz

Alejandro Ortiz

Alejandro is a Research Analyst, Private Investment Research for SharesPost Research LLC. Prior to joining SharesPost, he was a Valuation Analyst at Duff & Phelps with a focus on TMT industries.
Please Read These Important Legal Notices and Disclosures

CONFLICTS: This report is being published by SharesPost Research LLC and distributed by SharesPost Financial Corporation, a member of FINRA/SIPC. SharesPost Research LLC, SharesPost Financial Corporation, and SP Investments Management LLC, an investment adviser registered with the Securities and Exchange Commission, are wholly owned subsidiaries of SharesPost Inc. SP Investments Management is the investment manager of the SharesPost 100 Fund, a registered investment company, and other funds.

Recipients who are not market professionals or clients of SharesPost Financial Corporation should seek the advice of their own personal financial advisors before making any investment decisions based on this report. None of the information contained in this report represents an offer to buy or sell, or a solicitation of an offer to buy or sell, any security, and no buy or sell recommendation should be implied, nor shall there be any sale of these securities in any state or governmental jurisdiction in which said offer, solicitation, or sale would be unlawful under the securities laws of any such jurisdiction. This report does not constitute an offer to provide investment advice or services. Registered representatives of SharesPost Financial Corporation do not (1) advise any member on the merits or advisability of a particular investment or transaction, (2) assist in the determination of fair value of any security or investment, or (3) provide legal, tax, or transactional advisory services.

Information regarding companies in the SharesPost 100 List available on the website has been collected from or generated from publicly available sources. The availability of company information does not indicate that these companies have endorsed, supported, or otherwise participated with SharesPost. Company “thesis” is the opinion of SharesPost and is not a recommendation to buy, sell, or hold any security of such company.

Investors should be aware that, at any given point in time, the SharesPost 100 Fund (the “Fund”) may or may not have an ownership interest in any of the issuers discussed in the report. Accordingly, investors should not rely on the content of this report when deciding whether to buy, hold, or sell interests in the Fund. Instead, investors are encouraged to do their own independent research. Before investing in the Fund, investors are cautioned to carefully consider the investment objectives, risks, charges, and expenses before investing. For a prospectus containing more information about the Fund, please visit www.sharespost100fund.com. Read the prospectus carefully before investing.

ANALYST CERTIFICATION: The analyst(s) certifies that the views expressed in this report accurately reflect the personal views of such analyst(s) about any and all of the subject securities or issuers and that no part of such analyst compensation was, is, or will be, directly or indirectly related to the specific views contained in this report.

Analyst compensation is based upon various factors, including the overall performance of SharesPost Inc. and its subsidiaries and the performance and productivity of such analyst, including (1) feedback from clients of the SharesPost Financial Corporation and other stakeholders in our ecosystem, (2) the quality of such analyst’s research, and (3) the analyst’s contribution to the growth and development of our overall research effort. Analyst compensation is derived from all revenue sources of SharesPost Inc., including brokerage sales.

DISCLAIMER: This report does not contain a complete analysis of every material fact regarding any issuer, industry, or security. The opinions expressed in this report reflect our judgment at this date and are subject to change. The information contained in this report has been obtained from sources we consider to be reliable; however, we cannot guarantee the accuracy of all such information.

Any securities offered are offered by SharesPost Financial Corporation, a member of FINRA/SIPC. SharesPost Financial Corporation and SP Investments Management are wholly owned subsidiaries of SharesPost Inc. Certain affiliates of these entities may act as principals in such transactions.

Investing in private company securities is not suitable for all investors. An investment in private company securities is highly speculative and involves a high degree of risk. It should only be considered as a long-term investment. You must be prepared to withstand a total loss of your investment. Private company securities are also highly illiquid, and there is no guarantee that a market will develop for such securities. Each investment also carries its own specific risks. You should complete your own independent due diligence regarding the investment, including obtaining additional company information, opinions, financial projections, and legal or other investment advice.

Investing in private company securities is appropriate only for those investors who can tolerate a high degree of risk and do not require a liquid investment.

SharesPost, the SharesPost logo, My SharesPost, the SharesPost Index, SharesPost Investment Management, the SharesPost 100 Fund, and the SharesPost 100 List are all registered trademarks of SharesPost Inc. All other trademarks are the property of their respective owners.

Copyright © SharesPost, Inc. 2019. All rights reserved.