Uber Gets In The Ivy League

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It’s not a news, because we already know that Uber has raised $1.4B at a $17 billion valuation (one of the most valuable private companies that are currently operating), but this implies a lot and has already made a few people billionaires, on paper. The Ivy League of tech companies is that place where you reach billion dollar valuations without even having gone through an IPO. In the Ivy League you are able to raise more than a billion dollar as a private company.

Facebook is probably still holding that record, when in 2011 with Goldman Sachs and Digital Sky Technologies the company raised $1.50 billion. An enormous amount of money that has led the Menlo Park based tech giant to file for an IPO given the fact that it reached the 500 investors limit. Before the actual IPO, the company had raised $2.04B in venture capital rounds.

However Facebook, although it’s an exception, is not the only company that has joined the Ivy League a long time ago. Twitter, for example, has raised $1.20 billion in its pre-IPO history. Even though, the micro blogging platform has never had a billion dollar round, they have passed the billion dollar limit. Dropbox, a more recent product, is also part of the club, by having raised $1.10B at a $10 billion valuation.

There are also other companies that are part of this exclusive club and other that are waiting to get in. Airbnb is one of them, with a total funding of $776.40M at a $10 billion valuation. While we list these last two companies, Paul Graham, the founder of YCombinator might be laughing, since they both get accelerated from its incubator, which takes roughly an stake of 6%.

In the next few years, we might be seeing companies such as Github, Spotify and even Lyft joining the club, but there is still time for that. After four years of iterating and expanding, Travis Kalanick finds himself driving a company with a $17 billion valuation, which is currently operating in 128 cities in 37 countries around the world. It’s probably one of the fastest growing companies that Silicon Valley has ever seen in the last ten years.

This means that Uber has got more power now. The fact that they are facing a seventy years old industry, which doesn’t want to give up, has slowed them down in many cities and even countries. This amount of money is a huge boost in terms of fueling the operations and moving fasters. Given the structure of the company, for each new city they want to be in, they just need two employees and a set of drivers who are willing to move on the other side of the river.

It’s a successful strategy, thanks to the power of technology, which makes their operations faster and drivers’ lives easier. Fidelity, that is leading the round, is making a huge bet on the way this company will both increase their marketing side and convince governments, all around the world, that this is the right way. Although other taxi companies have tried to replicate the business model with a similar app, once the innovators (Uber) are in the market, it’s game over, even if you try to copy their idea.

Now, it’s just a matter of reaching more people, who don’t know what Uber is, because technology hasn’t penetrated older generations yet and, as we have already said, find loopholes in countries’ legislations or paying actual licenses to be able to operate. In the case of Manchester, the place where we are based, the game is over, even if the other companies are trying to fight Uber.

If you have got money, a new technology and a lot of power (Goldman Sachs and Google as primary investors), you shouldn’t be afraid of anything.

Edoardo Moreni

Blogger, Political Activist, Computer Scientist and Italian.