Ousted Uber CEO Travis Kalanick Re-Emerges With New Investment Fund

When you’re trying to put the past behind you and make a fresh start, it doesn’t hurt to have $1.4 billion in your pocket.

Travis Kalanick, the Uber co-founder who was pressed to resign as CEO during a year of turmoil for the ride-hailing giant, became a billionaire when he sold nearly 30 percent of his stake in the company in a large deal with Japan’s SoftBank and other investors in late 2017, according to Recode.

Rather than continuing to steer Uber through the increasingly competitive mobility sector, Kalanick now plans to nurture entrepreneurs through an investment fund he founded. He unveiled it with a sparing announcement Wednesday, as The Verge and other news outlets reported.

The fund Kalanick calls 10100 (and pronounces as “ten-one hundred”) will oversee his investments in both for-profit companies and non-profit ventures, Kalanick says in a brief statement on the fund website.

“The overarching theme will be about large-scale job creation, with investments in real estate, e-commerce, and emerging innovation in China and India,’’ Kalanick says in his statement. “Our non-profit efforts will initially focus on education and the future of cities.”

Kalanick also invited “anyone who wants to get to work” to e-mail him at travis@10100fund.com.

In spite of a bitter conflict with Benchmark, a major shareholder in Uber that sued him during a power struggle last year, Kalanick remains on the Uber board. However, his influence was diluted as SoftBank’s big investment in Uber made the Japanese company the largest single shareholder, with a 15 percent stake, and the board was enlarged to 17 members, according to a Recode report. Now, Kalanick says, he’s joining other boards—though he didn’t name them. One of them is healthtech company Kareo, Axios reported.

Irvine, CA-based Kareo provides office management and billing services for independent medical practices. Kareo founder Dan Rodrigues was Kalanick’s classmate at UCLA, and they also co-founded the startup Scour. Kalanick’s bio as a board member on Kareo’s website states that he has been an angel investor in Kareo and three other companies, all based in San Francisco: Expensify, LiveFyre, and StyleSeat.

Expensify is an automated service that keep track of job-related receipts, expense reports, and reimbursements. Its motto—“Expense reports that don’t suck!”—unabashedly sounds a bro-culture tone that has come to define Kalanick’s public persona. Social media engagement company LiveFyre was acquired by Adobe in 2016, and StyleSeat is a booking and payments marketplace for hairstylists and beauticians.

Kalanick hasn’t said whether he has partners in his investment fund, and how much of his personal assets he plans to spend on backing young companies and non-profits. While the $1.4 billion in proceeds from the sale of part of his Uber shares is a substantial war chest, his remaining stake in the ride-hailing company still accounts for a large majority of his fortune, according to the Bloomberg Billionaires Index.

Bloomberg’s estimates of that fortune, however, have shrunk from more than $6.6 billion almost exactly a year ago to $4.1 billion today, as Uber’s perceived valuation declined over the past year amid a barrage of criticism of the company during Kalanick’s term as CEO. The company was plagued with allegations of gender bias and sexual harassment, unfairness to its drivers, skirting of government regulations, and intellectual property theft, among other claims. Waymo, a self-driving vehicle unit of Google parent company Alphabet, settled its lawsuit for theft of trade secrets against Uber for $245 million worth of Uber shares in February. On top of that, Uber has posted billions of dollars in losses, and its path to profitability is uncertain.

Uber, valued at close to $70 billion early in 2017, was considered worth $48 billion under terms of the SoftBank transaction. Uber is now struggling to right itself under a new board and new CEO, Dara Khosrowshahi, to prepare for an IPO as early as next year.

As a private company, Uber isn’t obliged to reveal its financial condition, but it has periodically disclosed some numbers. Uber cleared net revenue of $7.4 billion in 2017 and sustained a loss of $4.5 billion, by Bloomberg’s analysis. Under Khosrowshahi’s leadership, the loss narrowed in the fourth quarter of 2017 compared to the prior quarter. But such conclusions depend on what accounting method is used; Uber also does not share full details on its expenses and other items, Bloomberg advises.

During its nine years in operation, Uber has raised $17.3 billion from investors, and spent about $10.7 billion, according to an undisclosed Bloomberg source.

Uber’s success has been measured not by profits but by its rapid global growth rate, which remained strong in 2017. But it has also had to wage costly battles with competitors in India and China. Uber sold its operation in China in 2016 to Didi Chuxing, gaining an ownership stake in the Chinese company.

This week, reports surfaced that a similar deal might be in the works wherein Uber’s rival Grab would acquire Uber’s operations in parts of Southeast Asia, according to Bloomberg.

Ceding some unprofitable regions to competitors might help Uber get closer to minimizing its losses in the run-up to an IPO. Some observers have speculated that SoftBank would encourage this strategy to relieve competitive pressures not only on Uber, but also on the other ride-hailing companies it has backed, which include Grab, Didi Chuxing, and India’s Ola, Bloomberg reports.

Meanwhile, Uber has been diversifying its business lines by rolling out Uber Eats, a restaurant food delivery service, and Uber Health, a ride-booking tool for people headed to non-emergency medical appointments.

Beyond that is the holy grail of all mobility companies—autonomous vehicles. Uber revealed this week that it has been running self-driving trucks on Arizona highways since November (with a human driver on board just in case), The Washington Post reported. In this arena also, Uber faces an array of competitors, including Waymo and Tesla.

Bernadette Tansey is Xconomy's San Francisco Editor. You can reach her at btansey@xconomy.com. Follow @Tansey_Xconomy

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