Uber to Drive Through $50 Billion Barrier

The Wall Street Journal reports ride-sharing app Uber plans to raise around $1.5 to $2 billion in new funding, giving it a valuation of at least $50 billion.
4:59 | 05/11/15

Coming up in the next {{countdown}} {{countdownlbl}}

Coming up next:

{{nextVideo.title}}

{{nextVideo.description}}

Skip to this video now

Now Playing:

{{currentVideo.title}}

Comments
Related Extras
Related Videos
Video Transcript
Transcript for Uber to Drive Through $50 Billion Barrier
Okay. It's Monday April 11. Markets in New York opens big numbers point five excuse me fifty billion dollars for the it's right naturally so effective and that's what's right. Over could be worth after its latest plan for fundraising. Gloucester girls reporting that over plans to raise around one half to two billion dollars in fact it would give the world's most hotly capitalists are you. Fifteen billion dollars possibly higher than that. Hello I'm Dan poplar in New York's joining us now with more what's going out over Aaron task finance. So Aaron that the journalist is saying that only FaceBook. And fat and fifty billion dollars night Portland public housing over doing business. Well Hoover is is everywhere and Hoover's been all over the world and Newburgh is kind of becoming a verb like you don't say I'm gonna call ride sharing companies him maneuver. Are just like people now say they're gonna groove something as opposed to searching something. Online. And I think that's this is a reflection of their fast growth and the fact that they have become the dominant player in a very fast growing industry. In other birds that we talk are at their FaceBook as well right so that's true and in the comparison that about face but as far as valuation goes. FaceBook though I mean how actual revenue before going public red accurate profit. They had a prime rate both companies have revenues so it's a FaceBook when they got a fifty billion dollar valuation 2011. Prior year they had two billion dollars in revenue so I'm in Wall Street parlance they were saying they were treating and a a trailing price to sales ratio of 25 times which is you know a very inflated multiple big numbers. Right so Hoover last year they had revenue of 400 million dollars that's million with an M. That it may be trading unit at a trailing price to sales basis of a 120 times. So it it's just we are way out of them do realm of valuation if you're looking at FaceBook. As the comparison. Having said that Hoover they're projected revenue growth. For this year is about 400%. Whereas back then FaceBook they're revenue growth was only quote 90% so. If it's crazy valuations about how you slice it I'm it. Yeah bribery is growing very very fast and that is what people are betting on still each time her having these funding rounds then more investors are jumping into this is it that simply fear of missing now. I think that's part of it also the New York Times that if he fit talked about how companies like Hoover are raising money. And they're doing more more rounds in rapid succession than in prior start up your as. And that is in part because they're so much capital out there. The Fed's been Ed zero we've talked about this for years now. Other system which many out there looking for replacement and that's. And you see a company like Hoover it looks like a can't miss and you want to get in before it goes public. And if you're Wilbur you're trying to cement yourself as the dominant player so this thing up keeper gonna throw money at us with collateral raise more money which only makes it that much more difficult for competitors like lift. To come after us because we're gonna become cemented as the player that everybody uses and so it if it's a cycle that's feeding on itself right now. Well I. How is the how such as the economy now then planned to all that you mentioned lit one of the competitors there eyes distant second army at Nicholas in the tail. Right well there there'd their distant second place I don't know that necessarily this is an arena where there's only going to be one player there's probably room for two or three. And when audits and done especially different markets different cultures have different preferences and and Hoover has run into some problems certainly in in different countries for the way. For some of its practices there's been some concerns about how it that's its drivers. And things of that nature so it's not for sure that Hoover's gonna win here. But it's getting harder and harder to see who's gonna be that that be competitor for them other than lift and lift right now the distant number two U. I'm in terms of the economy it now I think it's interesting movers getting it to other things they're doing food delivery. Rate and you hear about companies like Taco Bell want to do delivery now and so I've heard some people speculate that Hoover could become. The if the fact of the livery company. For company like Taco Bell for example or any other big food company that wants to delivery but doesn't want to buy a fleet of trucks. Because you have the Hoover drivers out there when they're not driving people around they can be driving stuff around to. I gave her some people say this could be competition for Amazon. And UPS and FedEx because. Again it mover they're so big and if so many drivers out there a lot of them were idle waiting for a passenger want to have them drop off. Either your lunch or a package so there's a lot of opportunities here for Hoover any other company. It in this. The economy now if you call. All right well so now I guess next how my order my Hoover and smells like a salute but there's the answer for you know why exactly Aaron tester got a quiet there and have a good Monday fugitive. Give up the latest headlines written and abcnews.com you know watching big number I'm Dan where New York.

This transcript has been automatically generated and may not be 100% accurate.

{"duration":"4:59","description":"The Wall Street Journal reports ride-sharing app Uber plans to raise around $1.5 to $2 billion in new funding, giving it a valuation of at least $50 billion. ","mediaType":"default","section":"ABCNews/Business","id":"30955134","title":"Uber to Drive Through $50 Billion Barrier","url":"/Business/video/uber-drive-50-billion-barrier-30955134"}