Uber Turns to Saudi Arabia for $3.5B Cash Infusion • Hacker News Board

Re: Uber Turns to Saudi Arabia for $3.5B Cash Infusion

#11

Post by breitling » Wed, Jun 01, 2016, 9:08 PM UTC

nikolay wrote: post #2

And that's precisely why I will boycott it and switch to Lyft! Edit: It looks like there's Saudi money in Lyft as well. :(

Good luck with that. Saudi Prince Al-Waleed bin Talal invested in Lyft [1]

[1]http://blogs.wsj.com/digits/2015/12/24/saudi-prince-alwaleed...

Re: Uber Turns to Saudi Arabia for $3.5B Cash Infusion

#12

Post by paulsutter » Wed, Jun 01, 2016, 9:11 PM UTC

CPLX wrote: post #5

Sincere question, can someone explain to me a plausible scenario at this point by which early investors actually receive a payout even slightly commensurate with their supposedly incredible investment? For example, how can someone in the seed round genuinely be able to cash out given the unbelievable amount of dilution that has taken place. What are the plausible scenarios where this occurs? EDIT: Specifically asking…

Uber has apparently raised $12.5 billion[1] and is valued at over $60 bilion. So seed investors are in fat city as long as the valuation holds. If the valuation goes down, it all depends on the preference multiples (which are likely greater than 1), and how low the value goes.

Uber has very significant revenue and growth (see the new Mary Meeker presentation), so they are a very valuable company. It may not be wise the way they are burning cash in China but hey we're all just spectators.

[1] Crunchbase says $9B and hasn't been updated to add in this money), https://www.crunchbase.com/organization/uber#/entity

Re: Uber Turns to Saudi Arabia for $3.5B Cash Infusion

#13

Post by Larrikin » Wed, Jun 01, 2016, 9:11 PM UTC

nikolay wrote: post #2

And that's precisely why I will boycott it and switch to Lyft! Edit: It looks like there's Saudi money in Lyft as well. :(

All the reprehensible stuff uber has done in the past, has made Lyft my goto app. Talking to Lyft drivers recently I've seen fewer and fewer that are driving for both because of negative experiences with uber. If Lyft can keep it up they might actually end up being on top

Edit: Why the downvotes?

Re: Uber Turns to Saudi Arabia for $3.5B Cash Infusion

#14

Post by nikolay » Wed, Jun 01, 2016, 9:12 PM UTC

breitling wrote: post #11

nikolay wrote: post #2

And that's precisely why I will boycott it and switch to Lyft! Edit: It looks like there's Saudi money in Lyft as well. :(

Good luck with that. Saudi Prince Al-Waleed bin Talal invested in Lyft [1] [1] http://blogs.wsj.com/digits/2015/12/24/saudi-prince-alwaleed...

Thanks! Well, I rarely use either. :) Anyway, Buycott [0] needs to add a Saudi filter!

[0]: https://www.buycott.com/

Re: Uber Turns to Saudi Arabia for $3.5B Cash Infusion

#15

Post by kinkdr » Wed, Jun 01, 2016, 9:13 PM UTC

Retric wrote: post #6

Uber needing 3.5B is a huge negative sign IMO. Clearly something is broken with their business model.

In my simplistic mind, their business model is to spend a lot of money today in order to create a monopoly tomorrow.

Re: Uber Turns to Saudi Arabia for $3.5B Cash Infusion

#16

Post by rexreed » Wed, Jun 01, 2016, 9:14 PM UTC

paulsutter wrote: post #12

CPLX wrote: post #5

Sincere question, can someone explain to me a plausible scenario at this point by which early investors actually receive a payout even slightly commensurate with their supposedly incredible investment? For example, how can someone in the seed round genuinely be able to cash out given the unbelievable amount of dilution that has taken place. What are the plausible scenarios where this occurs? EDIT: Specifically asking…

Uber has apparently raised $12.5 billion[1] and is valued at over $60 bilion. So seed investors are in fat city as long as the valuation holds. If the valuation goes down, it all depends on the preference multiples (which are likely greater than 1), and how low the value goes. Uber has very significant revenue and growth (see the new Mary Meeker presentation), so they are a very valuable company. It may not be wise t…

It's only Fat city if there's an exit at that valuation. We're talking Theranos style valuations here that can disappear at any time. They better find an exit scenario before the music stops or it's a world of hurt, especially for the later stage investors.

Re: Uber Turns to Saudi Arabia for $3.5B Cash Infusion

#17

Post by seizethecheese » Wed, Jun 01, 2016, 9:14 PM UTC

breitling wrote: post #7

craigvn wrote: post #3

Blood money while they continue to execute people in the street.

Get off your moral high-ground. We (USofA) still continue to execute people as well.

Get out of your moral valley, get a better vantage on the moral topology around you. The USA executes people, true, but generally not political opponents. Saudi is an order of magnitude worse than the US government.

Re: Uber Turns to Saudi Arabia for $3.5B Cash Infusion

#18

Post by supster » Wed, Jun 01, 2016, 9:14 PM UTC

CPLX wrote: post #5

Sincere question, can someone explain to me a plausible scenario at this point by which early investors actually receive a payout even slightly commensurate with their supposedly incredible investment? For example, how can someone in the seed round genuinely be able to cash out given the unbelievable amount of dilution that has taken place. What are the plausible scenarios where this occurs? EDIT: Specifically asking…

Sure there is dilution, but the overall valuation has increased faster. I.e. the share of the pie is smaller but the pie has gotten a lot bigger, so you end up with a bigger piece.

Re: Uber Turns to Saudi Arabia for $3.5B Cash Infusion

#19

Post by rexreed » Wed, Jun 01, 2016, 9:16 PM UTC

koolba wrote: post #10

Retric wrote: post #6

Uber needing 3.5B is a huge negative sign IMO. Clearly something is broken with their business model.

> Uber needing 3.5B is a huge negative sign IMO. Clearly something is broken with their business model. If someone is willing to give you $3.5 billion dollars I'd argue you've got a solid business model. Either that you're just really good at raising capital.

Let's revise "solid business model" to "solid ability to sell the company's value". A solid business model doesn't require this sort of continuous cash infusion.

Re: Uber Turns to Saudi Arabia for $3.5B Cash Infusion

#20

Post by charlesdm » Wed, Jun 01, 2016, 9:16 PM UTC

CPLX wrote: post #5

Sincere question, can someone explain to me a plausible scenario at this point by which early investors actually receive a payout even slightly commensurate with their supposedly incredible investment? For example, how can someone in the seed round genuinely be able to cash out given the unbelievable amount of dilution that has taken place. What are the plausible scenarios where this occurs? EDIT: Specifically asking…

It's possible to sell those shares on a secondary market, i.e. seed investors might have already cashed out by now.