Uber’s revenue has been leaked and it’s pretty impressive

The digital taxi service Uber is raising money again, which means that people are once again gawping at the company’s valuation. The previous round, last summer, was a $1.2 billion deal that valued the company at $18.2 billion (post-money). The new valuation will probably be far higher. Most observers view that valuation as a sign of obvious insanity — further confirmation of “a new tech bubble.” Based on what I am hearing about the company’s financial performance, most of these observers, respectfully, don’t know what they’re talking about. Uber’s new investors could obviously lose money, just like any investors. But for two reasons, the investment is probably a more reasonable bet than it might initially appear. First, the new Uber investors will almost certainly buy preferred stock, not common stock — a point that private-market valuation gawpers often miss. When you buy preferred stock, your downside is usually limited. Preferred investors are higher in the capital structure than common investors (thus the “preferred”), so in a liquidity event, they usually get all their money back, even if the company sells for a much lower valuation than the one at which they invested. In many cases, including, possibly, this one, preferred investors also get a guaranteed return.