Uber on track for a 2019 IPO: CEO
Uber is on track to go public in 2019, its chief executive Dara Khosrowshahi told CNBC on Wednesday.
“We’re in a good position in terms of the company’s profile, in terms of profitability and margins continue to get better,” Khosrowshahi told CNBC’s Carl Quintanilla at the Code Conference in Rancho Palos Verdes, California.
Khosrowshahi added that Uber has a “very strong balance sheet.”
“I do think that we’re on track in 2019 for an IPO,” he said. “Lots of things can happen in the world but we have a reasonable buffer as well, so I think we’re in a pretty good spot.”
The CEO specified later on Wednesday that he was looking at the second half of 2019 for an IPO. A person familiar with the matter had told CNBC that Uber is targeting to go public in late 2019 but the company has not started interviewing banks yet.
Last week, Uber said it had strong revenue growth and reduced losses in the first quarter of this year. The company revealed that net revenue was up 67 percent on-year and losses narrowed 49 percent on-year. Those numbers exclude a $3 billion first quarter gain from the sale of Uber’s Southeast Asian business to rival company Grab and a business merger in Russia with Yandex.Taxi.
The CEO said that he is looking to build out his management team, rebuild the brand and improve the product before the company goes public. That includes hiring a chief financial officer, he said.
Khosrowshahi also spoke about legendary investor Warren Buffett, who earlier told CNBC that he was an admirer of the Uber chief.
Buffett’s comments were in response to a Bloomberg report that said his firm, Berkshire Hathaway, offered Uber a $3 billion investment earlier this year. Buffett told CNBC that some of the reported details were “not correct” but confirmed that his company held talks with the ride-hailing tech firm.
“Like Warren said, we did have discussions,” Khosrowshahi said. “One of my business goals in life has been to get Warren Buffett to invest in something that I’m involved in and, so far, I failed.”
Khosrowshahi added that it’s possible that talks with Berkshire might resume one day. He explained that Uber’s “enormous growth trajectory” comes with “considerable risk.”
“I don’t think we necessarily fit in with the typical Warren Buffett investment. Maybe we can be a different kind of an investment, a portfolio diversification play for him,” he said.
While he hopes to convince Buffett to invest in Uber one day, Khosrowshahi said strategic investments, though welcomed, were not a main priority at the moment.
“It’s not first priority for me right now,” he said. “First priority is to continue building a management team, continue to invest in the brand and get us in a position where we can build a big business and, along the way, go public.”
Khosrowshahi explained that, while the core ride-sharing business was vital for Uber, the company was also making many “forward investments” into areas like food delivery and electric bikes. In April, Uber said it was acquiring a bike-sharing company called Jump Bikes.
“We are now investing in what we call Uber as a platform,” he said, adding that the company is making available a variety of transportation options for passengers to commute from one point to another.
“Whether it’s taking a car, whether it’s taking a pooled car, whether it’s taking a bike, whether you should walk or even now we want to build out the capability for you to take a bus or subway,” he said. “We want to be the A-to-B platform for transportation.”
But the real push forward for Uber is to eventually take transportation to the air with a fleet of airborne taxis. The company revealed a “flying car” concept aircraft at its second annual Uber Elevate Summit earlier this month. The prototypes that Uber showed looked more like drones than helicopters, with four rotors on wings.
The flying cars would take off and land vertically from skyports, air stations on rooftops or the ground. Company officials said those skyports would be equipped to ultimately handle about 200 takeoffs and landings in an hour. Uber plans to make that transport service available to passengers in two to five years.
Khosrowshahi explained that, as cities build more high-rise buildings in residential and commercial areas, transportation needs to be able to get to the next level.
“Elon Musk wants to go underground, we are going to, hopefully, make overground work. And we’ll see which one works,” he said.