What makes Uber Technologies the world’s most valuable venture-backed technology company?

Investors say size and growth. The business is transforming global transportation networks.

On closer inspection of its financial performance, Uber also pioneered a very expensive way of establishing a market and staying on top.

Yet Uber has had little trouble finding investors eager to buy into its vision. It relishes telling backers about gross bookings, or the amount riders pay for service. That number is enormous, totaling $37 billion last year.

Most of that goes to drivers. Uber’s cut, or net revenue, came to $7.4 billion. Compared to public companies with similar valuations, Uber’s revenue lags well behind.

Uber has worked to downplay its persistent losses. Because it doesn’t disclose financial results with much consistency, it’s easy to lose sight of how much of investors’ money Uber has spent.

Since its founding nine years ago, Uber has burned through about $10.7 billion, said a person familiar with the matter. Over the past decade, only one public technology company in North America lost more in a year than Uber did in 2017. Investors have contributed $17.3 billion to Uber.

An analysis of Uber’s financial position, based on Bloomberg reporting and voluntary disclosures by the privately held company, shows that Uber is a corporate anomaly. Few companies in history have grown so fast or lost so much in such a short period. After reaching a stage of maturity most companies never realize, it has yet to turn a profit and remains deeply in the red.

Uber showed a sign of promise in the first few months with Dara Khosrowshahi at the helm: Its loss narrowed from the previous quarter. “Our growth at scale remains incredibly strong, and we are driving meaningful improvements in our margins,” Uber said in a statement.

The only other public tech companies that have come close to rivaling Uber’s ability to lose money are chipmakers.

What Uber backers can point to is a nearly unmatched pace of sales growth. Even as Uber’s revenue reached $2.3 billion in the fourth quarter of 2017, its annual growth rate remained strong, at about 90 percent compared with 2016. That’s faster than most tech companies with a similar valuation. Only one U.S. tech company of Uber’s size, Micron, grew at anything close to that last year.

 

King and Newcomer write for Bloomberg News.