We figured out how much money new European unicorn BlaBlaCar could be making

French ridesharing startup BlaBlaCar has reportedly raised $US160 million (£104 million) in new funding, which brings its valuation to $US1.2 billion (£780 million).

How could a hitchhiking app be worth so much? Hardly anyone uses it. It has only 2 million monthly active users. For comparison, Whatsapp has 900 million.

But some back-of-the-envelope calculations show that BlaBlaCar could actually already be generating surprisingly robust revenues.

The model that BlaBlaCar follows is similar to Uber and other ridesharing services, but the way the service works is slightly different.

BlaBlaCar riders pay their driver a fee, and the company takes around a 12% cut from that amount (which is similar to how Uber works). But what’s different about the service is that BlaBlaCar doesn’t operate within cities — instead it’s all about travel between long-distance destinations. Need a ride from Paris to Brussels, but don’t want to pay the expensive train or plane fare? BlaBlaCar is your solution.

Let’s take a look at some of BlaBlaCar’s numbers to figure out how much money it’s bringing in.

BlaBlaCar COO and cofounder Nicolas Brusson told The Financial Times in December that the company has 2 million people who use its services every month. And the company said earlier last year that the average ride charge was around $US25 (£16). Factor in BlaBlaCar’s 12% cut and it’s bringing in around $US72 million (£46.8 million) every year, assuming that its users take one trip every month.

Here’s the sum:

  • 2 million rides
  • x $US25 each
  • x 12 months of the year
  • x 12% cut for BlaBlaCar
  • = $US72 million in revenues

We used old, conservative numbers to generate that estimate.

An annual revenue of $US72 million is no small figure, but if it were recurring annual revenue it would make a one-time investment of $US160 million look reasonable.

It pales in comparison to Uber’s predicted revenue figures. Uber is expected to hit an annual revenue run rate of $US10 billion (£6.5 billion) by the end of 2015. Uber takes a larger cut than BlaBlaCar, keeping 20% instead of 12%, so it’s expected to keep $US2 billion (£1.3 billion) of that total. It also does many more rides.

BlaBlaCar doesn’t yet operate in the US, and doesn’t appear to have any plans to head there and compete with Uber. COO Nicolas Brusson told The Financial Times in a December 2014 interview that “the US is not the best market for us in many ways.” Instead, BlaBlaCar is focusing on other international markets like India, Turkey, Brazil, and Russia.

It can be tricky for European ridesharing companies to expand to the US and attempt to take on the bigger players. British ridesharing company Hailo expanded to New York in 2013, but ended its operations there in 2014. Hailo’s CEO, Jay Bregman, also departed the company shortly afterwards.

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