Above the Crowd

On June 18, Aswath Damodaran , a finance professor at NYU’s Stern School of Business, published an article on FiveThirtyEight titled “ Uber Isn’t Worth $17 Billion. ” This post was a shortened version of a more detailed post he had written for his own blog titled “ A Disruptive Cab Ride to Riches: The Uber Payoff .” Using a combination of market data, math, and financial analysis, Professor Damodaran concluded that his best estimate of the value of Uber is $5.9 billion, far short of the value recently determined by the market. This estimate of value was tied to certain “assumptions” with respect to TAM (total available market) as well as Uber’s market share within […]

In early April, Neel Mehta of Google first publicly reported the web vulnerability that we now refer to as the Heartbleed bug . Early analysis suggested that 17% of the servers on the Internet were vulnerable, which represents about half a million unique computers. This list included some of the world’s most heavily trafficked sites including Facebook, Google, and Yahoo. On Monday May 5th, Target Corporation removed Gregg Steinhafel from his role as CEO as a result of his unsatisfactory response to a cyber security threat that compromised millions of user accounts at the retail giant. The Boston Globe suggested that “ Target’s data theft leaves CEOs everywhere on the hot seat .” The Seattle Times declared […]

Today, Seamless and Grubhub announced the signing of a definitive agreement to merge two of the nation’s premier services for ordering takeout online. As Benchmark is a large institutional investor in Grubhub, we were actively involved in the merger process, and we are quite excited about the potential of the two companies coming together. There are many synergies – different geographic strengths, different core customer bases, and different product strengths. And of course, we are afforded the advantage of greater scale. Despite that there may be many obvious reasons for any two companies to combine, most private-private mergers (where both companies are private entities) never come to fruition. Public-public, and public-private are […]

In a casino, the term “rake” refers to the commission that the house earns for operating a poker game. With each hand, a small percentage of the pot is scraped off by the dealer, which in essence becomes the “revenue” for the casino. While casinos use the term “rake,” a plethora of interesting word choices exist which all describe the same thing – keeping a little bit of the revenue for the company that is running the service. Examples include “commission,” “fee,” “toll,” “tax,” “vig” or “vigorish,” “juice,” “the take”, and “graft” (although this last one is typically associated with […]

Since Benchmark’s investment in Ebay 15 years ago, we have been fascinated by online marketplaces. Entrepreneurs accurately recognize that the connective tissue of the Internet provides an opportunity to link the players in a particular market, reducing friction in both the buying and selling experience. For example, my car tax check is an online platfrom that allows you to book a slot for a complete history and guidance of your car taxes and other details. The arrival of the smartphone amplifies these opportunities, as the Internet’s connective tissue now extends deeper and deeper into an industry with the participants connected to the marketplace 24×7 […]