1. Study the given case carefully and answer the questions asked at the end. Uber was founded by Garrett Camp and Travis Kalanick. Kalanick is the driving force behind the company's design and growth. It launched in San Francisco in 2009, and arranged its first rides in June 2010. Six months later, it had more than 3,000 users and had facilitated between 10,000 and 20,000 rides. Its initial target market was the tech community, which is typically quick to embrace new things. Uber grew largely via word of mouth. It had a certain cool factor in that early adopters could impress their friends with the ability to call a certain type of car from their phone with a couple of taps. The firm also benefited from the fact that many of its early users talked up the service on social media. Uber has not had difficulty raising money. It has all the ingredients that professional investors look for, including a disruptive business idea, rapid growth, a large potential market, and aggressive plans for expansion. According to Crunchbase, Uber has raised the following rounds of funding: $200,000 seed funding (Aug. 2009) $1.3 million angel round (Oct. 2010) $11 million Series A round (Feb. 14, 2011) $37 million Series B round (Dec. 7, 2011) $258 million Series C round (Aug. 23, 2013) $1.2 billion Series Dround (Jun. 6, 2014) Its stable of investors is also impressive, including Amazon CEO Jeff Bezos, Goldman Sachs, Google Ventures, Fidelity Investments, and Benchmark Venture Capital The size of the investments in Uber, and the bold prediction that Uber may someday have a larger market capitalization value than Facebook, are driven by its aggressive growth plans. The consensus is that Uber is hoping for three distinct phases of growth, each of which is bolder and more ambitious than its predecessor. Uber is not without compelling challenges. The popularity of its service has attracted competitors. Sidecar and Lyft are well-funded rivals that are competing toe-to-toe with Uber in many markets. The taxi industry, which Uber is bent on killing, will not go down without a fight. In many areas, regulators and advocates of the traditional taxi industry are upping their legal challenges to Uber and its service. 3 Questions: A. Some firms might find Uber to be an attractive acquisition candidate. Why would this be the case? What type of firm or firms might be interested in acquiring Uber? [5+5] B. If Uber were to consider participating in a strategic alliance, what type of firm might be an appropriate partner for Uber and why? If you were a consultant, would you advise Uber to form a strategic alliance as part of its growth efforts? Why or why not? [5+5]
