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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This report is 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.

Recipients who are not market professionals or clients of SharesPost Financial Corporation should seek the advice of their own financial advisors before making any investment decisions. 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 service. Registered representatives of SharesPost Financial Corporation do not (1) advise any member on the merits or prudence of a particular investment or transaction, or (2) assist in the determination of fair value of any security or investment, or (3) provide legal, tax, or transactional advisory services.

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

Analyst compensation is indirectly based upon the growth and success of SharesPost, Inc., including the overall performance of its subsidiaries, the individualized performance of any such analyst, and the development and progression of the overall research effort. SharesPost, Inc. earns revenue from, among other avenues, brokerage sales, and therefore the analyst may indirectly benefit from research reports that have the ultimate effect of increasing trading activity, either through SharesPost Financial Corporation and/or with SharesPost Investment Management, LLC.

DISCLAIMER

This report does not contain a complete analysis of every material fact regarding any issuer, industry, transaction, or security. The opinions expressed in this report reflect the judgment of the analyst at a specific point in time and are subject to change. The information contained in this report has been obtained from sources the analysts consider to be reliable; however, there is no guarantee the any of the information is accurate.

Securities referenced in this report may be offered by SharesPost Financial Corporation, member 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, involving a high degree of risk, and investors should 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 and investors should conduct their own, independent due diligence regarding the investment, including obtaining additional information about the company, opinions, financial projections and legal or investment advice.

Accordingly, 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, and SharesPost Investment Management 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 & DISCLOSURES

CONFLICTS

This report is 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.

Recipients who are not market professionals or clients of SharesPost Financial Corporation should seek the advice of their own financial advisors before making any investment decisions. 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 service. Registered representatives of SharesPost Financial Corporation do not (1) advise any member on the merits or prudence of a particular investment or transaction, or (2) assist in the determination of fair value of any security or investment, or (3) provide legal, tax, or transactional advisory services.

ANALYST CERTIFICATION

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

Analyst compensation is indirectly based upon the growth and success of SharesPost, Inc., including the overall performance of its subsidiaries, the individualized performance of any such analyst, and the development and progression of the overall research effort. SharesPost, Inc. earns revenue from, among other avenues, brokerage sales, and therefore the analyst may indirectly benefit from research reports that have the ultimate effect of increasing trading activity, either through SharesPost Financial Corporation and/or with SharesPost Investment Management, LLC.

DISCLAIMER

This report does not contain a complete analysis of every material fact regarding any issuer, industry, transaction, or security. The opinions expressed in this report reflect the judgment of the analyst at a specific point in time and are subject to change. The information contained in this report has been obtained from sources the analysts consider to be reliable; however, there is no guarantee the any of the information is accurate.

Securities referenced in this report may be offered by SharesPost Financial Corporation, member 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, involving a high degree of risk, and investors should 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 and investors should conduct their own, independent due diligence regarding the investment, including obtaining additional information about the company, opinions, financial projections and legal or investment advice.

Accordingly, 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, and SharesPost Investment Management are all registered trademarks of SharesPost, Inc. All other trademarks are the property of their respective owners.

Copyright SharesPost, Inc. 2019. All rights reserved.