Uber Freight to Acquire Transplace

Transaction Overview

• On July 22nd, 2021, Uber Freight entered into a definitive agreement to acquire Transplace for $2.25 billion, consisting of $750 million in the common stock of parent company, Uber Technologies, Inc (NYSE: UBER) and the remainder in cash.
• The combination of Uber Freight and Transplace will result in a fully-scaled logistics platform to meet the needs of both shippers and carriers, irrespective of their business size and transportation needs.

TBP’s Outlook on Uber’s Strategy

• Uber has a history of having made billions from its divestitures in China, Russia, and Southeast Asia.
• China was the first tactical exit for Uber where they sold their business unit to Didi for an 18.8% stake, which was later reduced to 15.4% as a result of subsequent fundraising, resulting in a $2 billion increase in value for Uber.
• Uber’s exit from Southeast Asia was a similar play where they sold their business unit to Grab, an online platform that integrates city transportation, for a 30% stake which later reduced to 23%, resulting in a $1 billion increase in value in just one year.
• After a successful exit from China and Southeast Asia, Uber formed a joint venture with Yandex in Russia, grabbing a 38% stake in Yandex at a valuation of $3.68 billion.
• The digital freight brokerage market size was valued at $1.9 billion in 2020 and is projected to reach $18.8 billion by 2028, growing at a rate of 28.8% CAGR.
• To focus on this market, Uber Freight raised $500M in 2020 from Greenbriar Equity Group, valuing the unit at $3.3 billion. This transaction valued Uber Freight at 3.6x its LTM revenue of $917m, ending in September 2020.
• Logistics is undergoing a transformation driven by COVID-19, and we can reasonably anticipate Uber repeating its divestiture strategy to create value by spinning off an Uber Freight IPO.

TBP’s Analysis on Uber’s Acquisitions in the B2C Sector

• In 2020, Uber acquired Postmates for $2.65 billion, an urban logistics platform that connects customers with local couriers that deliver products from various stores and restaurants.
• In 2020, it also acquired RouteMatch Software for $115 million, which provides intelligent transportation systems to public and private transit sectors.
• In 2021, Uber acquired the remaining 47% stake in Delivery Technologies for $1.4 billion, which offers on-demand grocery delivery services.
• These investments represent an investment focus on B2C last-mile delivery which is a fundamentally different business than Uber Freight which is focused on B2B transportation logistics.

Other Notable Players in Digital Freight Brokerage Space

• Along with Uber Freight, companies like Convoy, Transfix, and Loadsmart provide similar services to match carriers and loads based on origin, destination, type of load, price, and timing.
• In 2020, Loadsmart raised $95m at a post-money valuation of $410m, tallying its aggregate amount raised to $151.8m.
• In 2019, Convoy raised $400m at a post-money valuation of $2.75 billion, tallying its aggregate amount raised to $666m.
• In 2017, Transfix raised $42 million tallying its aggregate amount raised to $78.5 million.
• These transactions indicate the established players within the space that have raised funds at a premium valuation.

TBP’s Experience in Transportation Management/Digital Freight Brokerage space

• TBP was the exclusive financial advisor to ProcessWeaver, the leading first-to-final mile multi-carrier transportation management solutions provider, in its acquisition by Elemica.
• TBP doubled down on its earlier co-investment in HwyHaul, a leading digital freight platform for fresh produce, in its recent Series A funding.

Appendix: Transactions

TBP was NOT an Advisor to this Transaction.