Uber is Bigger & Stronger
Uber's revenue mix change over last 5 years
Welcome to another edition of Trendline!
Today, we are looking at Uber - one of the most (in) famous Tech company of the last 10 years.
Lets dive in!
Chart of the Week
When Covid-19 lockdowns started back in March - 2023, things became dire for Uber overnight.
At that time, 80% of Uber’s revenue came from its Mobility segment (the ride-sharing business that we know Uber for). As lockdowns forced most of us the stay indoors, Uber’s Mobility revenue dropped 68% from Q1-20 to Q2-20.
Uber responded by cutting costs, laying off 3,700 employees globally in May 2020 (~14% of its workforce at that time - LINK)
Things were not great for Uber - However, there was a silver lining.
It had a growing Food Delivery business (Uber Eats) which was primed to take advantage of the lockdowns, as many of us had to rely on Delivery apps to bring us food and groceries.
Uber went all-in on Delivery - revenue from Delivery skyrocketed, increasing 230% in 1 year (from Q1-20 to Q1-21). Uber further supercharged this by acquiring Postmates towards the end of 2020 - a rival delivery business, for $2.65 Billion.
Interestingly, Uber also operates a lesser-known B2B logistics division that connects shippers with carriers, like truckers, for ground transport.
Towards the end of 2021, Uber finally decided to get serious about this business by acquiring Transplace for $2.25 billion. You can read more about Uber Freight here (LINK)
Fast forward to 2023, and Uber is not only much larger, but far more diversified:
Total Revenue is 2.7x larger (Q1-23 vs. Q1-20)
Mobility (Ride sharing) has also grown by 75% over 3 years (Q1-23 vs Q1-20) but is now only ~50% of total revenue.
Delivery and Freight are now meaningfully large businesses - $3.1 billion and $1.4 billion in Q1-23 revenue, accounting for the other half of Uber’s revenue.
Uber not only weathered the Pandemic but emerged from it, stronger and more robust than ever before.
What kind of investor are you?
If you are reading this, chances are you (like me), love stocks and investing.
But do you know how to value companies so that you don’t overpay for stocks. Especially, how to have the right mindset, and techniques depending on whether its an Uber (unprofitable, high growth) or an Apple (hugely profitable, stable growth)
Investors lie on a spectrum - think Warren Buffet on end of the spectrum to Marc Andreesen (Venture Capitalist) on the other end. You can make good returns no matter what the style, so long as you know what you are doing.
So how to learn how to do value companies properly? Well, good news.
Brain Feroldi, a well know investing educator, who 468K Twitter followers and has written a book, is taking a free 1 hour webinar* on this topic. The Webinar is on Wed 19th July, from 11am to 12 noon (EDT).
I am joining him there to learn how to value companies properly. You can do the same by registering below.
PS: These webinars are usually recorded. If the time doesn’t work for you, you can still register and get the recording video and transcript emailed to you for free.
Flex your skills by answering this week’s question about Uber. As always, answer in the next email.
Uber was famous for guzzling a lot of investor money. How much money had it raised, in total, by the time it went public in 2019?
Answer to last post’s business quiz question (see post):
That’s all for this week. Thanks for reading! 👋
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