Hours after his own board member publicly criticized Silicon Valley unicorns for refusing to go public, Uber Chief Executive Travis Kalanick said he has no plans for an initial stock offering.
Uber CEO Travis Kalanick Not Ready to Take the Company Public
Kalanick talks about the challenges Uber confronts in China, where competition “just works different.”
Asa Mathat
Kalanick said the ride-sharing company he founded five years ago still needs time to mature.
“We’re like eighth graders and someone’s telling us we need to go to the prom,” said Kalanick in remarks Tuesday at the Wall Street Journal’s WSJDLive conference in Laguna Beach, Calif. “We’re too early in our cycle. Most companies, when they go public, it’s usually later in their life.”
The remarks seemed to come in response to those of Uber board member Bill Gurley, who earlier in the day said startups whose executives refuse to go public should be given a “liquidity discount” of as much as 70 percent to 80 percent of their valuations.
Kalanick said of the unusually public debate that he and Gurley don’t “agree on everything — but that’s okay.”
The founder of the fast-growing company said investors and employees will eventually be rewarded for their patience. For the moment, at least, Uber is having no difficulty raising capital from private investors. Just this summer, it closed a $1 billion investment round that gave it a $51 billion valuation.
Kalanick’s attention is increasingly occupied by China, a market where Uber faces fierce competition from a larger domestic incumbent, Didi Kuaidi. The market’s potential is enormous: China already accounts for nearly one-third of all its trips and the service is growing rapidly.
Its largest city, Chengdu, capital of southwestern China’s Sichuan province, is already 100 times bigger than San Francisco over a comparable period. And there are some 80 cities with a population of five million people or more — compared with just five such cities in the United States.
“It’s an amazing place to be,” Kalanick said. “There are huge cities that really need transportation alternatives and people who could be drivers who are looking for ways to make a living.”
But the competition is different from other markets. Internet giant Tencent is an investor in Didi Dache, the cab-hailing app that merged earlier this year with Alibaba-backed Kuaidi Dache. Tencent’s popular messaging app, WeChat, shut down Uber’s accounts — suppressing positive stories about Uber while elevating negative ones, Kalanick said.
“Competition in China just works different,” Kalanick said. “We play it by different rules. But that’s okay, we believe in the quality of our product, the quality of our technology and the fierceness that our city teams put in the effort.”
Kalanick said Uber has grown its share to roughly 30 percent, from 1 percent following a tentative August 2013 launch. Gaining share in the market is not without cost.
“We’re definitely spending $1 billion a year on that effort,” Kalanick said. “We feel great about it.”
This article originally appeared on Recode.net.
