Some back-of-the-envelope math shows why: Take Uber's $1.5 million angel round, led by First Round Capital and Lowercase Capital. It had a valuation of around $4 million pre-money. The company's later rounds had valuations of approximately $40 million for its Series A in 2011 and $300 million Series B later that year. Six months ago, Uber raised money from Google Ventures and TPG at a $3.5 billion post-money valuation. The company's revenues were around $125 million last year, which handily beat expectations.
The company's success is having a halo effect for its early investors, who seem to be having no trouble raising new funds. In investment meetings, limited partners are preaching the gospel of Uber. "Anyone with Uber in their portfolio is looking pretty good right now," one LP said.
In addition to First Round and Lowercase, that Angel round included backing from angel investors Mitch Kapor, Alfred Lin, Naval Ravikant, Babak Nivi, Cyan and Scott Banister, Shawn Fanning, Jason Calcanis, Mike Walsh, Oren Michels, and Josh Spear.
Shervin Pishevar was an early investor in Uber and later led Menlo Ventures' $37 million round in the company. He's used momentum on that and other investments like Tumblr and Warby Parker to raise money for his own fund, Sherpa Ventures. On Tuesday Dan Primack reported that Pishevar has held a first close on $87 million in commitments, beating its initial target of $60 million. The overall fund has a target of $150 million. One of Sherpa Ventures' limited partners is TPG, which also invested in Uber.
Techstars CEO David Cohen, who invested in Uber's first $1.25 million round, is in the market raising $150 million for his next fund (called Bullet Time Ventures 2014), according to an SEC filing from December. The new fund, his third, is a significant step up from his prior fund, a $25.6 million vehicle raised in 2012, and sources say he is nearing a close on the full amount. (Cohen declined to comment beyond the filing.)
Meanwhile, Founder Collective, which backed Uber's Series A, is currently investing from its second fund, a $70 million vehicle which closed last year. It is almost double the size of its first fund. And First Round Capital is slated to raise a new fund in the second half of this year.
If the company continues its current trajectory, the Uber Effect may become the new Facebook Effect. Recall that Facebook's early investors, including Jim Breyer, Marc Andreessen, Peter Thiel, Reid Hoffman, and David Sze, have been among the most successful investors for the past several years.
Surprisingly, given how close-knit the Silicon Valley investor community is, there's only one investor Uber and Facebook (FB) have in common: Goldman Sachs (GS). Update: Uber and Facebook actually have two investors in common. In addition to Goldman Sachs, angel investor Matt Ocko made early bets in each company.
The web startup has thrived by making it easy to list and find rooms to rent. But CEO Brian Chesky thinks the site can be an eBay for the social age.
FORTUNE -- The house-sharing website Airbnb lists 4,881 apartments for rent in Paris, but CEO Brian Chesky is paying a lot of attention to listings like the one for a parking spot in Île-de-France for $20 a night. Strange things MOREJessi Hempel, writer - May 3, 2012 5:00 AM ET
If there is a guru of networking, it is Reid Hoffman. Here he explains how to do it right -- and wrong -- in an excerpt from his new book with Ben Casnocha, The Start-Up of You.
FORTUNE -- Forget Dale Carnegie. He understood how important connections were, but missed out on the authenticity part -- which, say Reid Hoffman and Ben Casnocha, authors of The Start-Up of You, is the key to building MOREJan 24, 2012 5:00 AM ET
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* Google (GOOG) chairman Eric Schmidt told the U.S. Senate antitrust committee that the iPhone 4S's voice assistant, Siri, poses a "competitive threat" to his company's business. Confessed Schmidt: "Apple's Siri is a significant development -- a voice-activated means of accessing answers through iPhones that demonstrates the innovations in search." (Apple MOREJP Mangalindan, Writer - Nov 7, 2011 3:30 AM ET
Grockit marries social media with standardized test prep.
Despite the controversy surrounding standardized tests for college admissions (Are they fair? What do they measure?), exams like the SAT and ACT remain a necessary evil for most college-bound students.
The same might be said of the process of preparing for these exams, a phenomenon that has spawned a multi-billion dollar industry led by two companies, the Washington Post Co.'s (WPO) Kaplan and The Princeton MOREJessica Shambora, Writer-Reporter - Jan 4, 2010 6:00 AM ET
At least one company is making money off of social networking. The game developer behind 'FarmVille' and 'Mafia Wars' has seen its web-based games take off - and deliver profits.
On any given day 500,000 tractors are sold on the Internet. But don't start buying stock in John Deere or Caterpillar just yet. These are $20 "virtual" tractors that belong to the 50 million players of FarmVille, the largest and fastest-growing MOREJessica Shambora, Writer-Reporter - Oct 26, 2009 6:00 AM ET
>Jennifer Lai - Jul 24, 2009 10:34 AM ET
One of the themes cropping up again and again at this year's Brainstorm technology conference is the pervasive use of social services like Facebook, and the frustration that while they dominate the consumer world, they aren't quite right for large enterprises.Michael V. Copeland, Senior Writer - Jul 23, 2009 8:18 PM ET
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