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Six years after making what at the time was its largest venture investment ever, Google’s $258 million bet on Uber has multiplied by about 20-fold to be worth more than $5 billion.
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According to Uber’s IPO prospectus filed on Thursday, Google parent Alphabet owns a 5.2 percent stake in the ride-sharing company. With Uber reportedly looking to go public at a $100 billion valuation, Alphabet’s shares are worth about $5.2 billion, though that number could fluctuate wildly between now and the lock-up expiration six months after the IPO.
Alphabet is emerging as one of the big winners in the ride-hailing boom, even though the company is viewed as a potential competitor in the space once self-driving cars hit the market. Alphabet also invested $500 million in Uber arch-rival Lyft through its late-stage investment arm, CapitalG, in October 2017. Its 5.3 percent stake in Lyft is worth $783 million as of Thursday’s close. Alphabet is also locked into those shares until 180 days after last month’s IPO.
While Alphabet is turning a handsome profit from its Uber investment, the two companies are hardly allies.
David Drummond, Alphabet’s senior vice president of corporate development and chief legal officer, had an Uber board seat until 2016, when he left because of growing competition in self-driving technology. The following year Alphabet sued Uber, claiming the ride-sharing company had stolen trade secrets when it acquired a self-driving technology start-up built by former Google executive Anthony Levandowski.
The case was settled last February, and Uber agreed to pay Waymo a 0.34 percent equity stake, which at the time amounted to about $245 million. Those shares account for about 7 percent of Alphabet’s current stake in Uber.
There’s also a big business relationship between the companies. From the beginning of 2016 through 2018, Uber paid Google $58 million for map services as well as $631 million for marketing and advertising services and $70 million for technology infrastructure and enterprise services.