Institutional Investors Will Learn to Like the Sharing Economy

Look for conservative institutions to embrace the eventual IPOs of peer-to-peer rental services such as Airbnb and Uber.


Mike Walsh is betting that a little money in the so-called sharing economy will go a long way. Last June, Walsh launched Structure Capital, a San Francisco firm that provides between $100,000 and $200,000 in early-stage financing to companies targeting what he calls underutilized assets and excess capacity. He was among the first investors in five-year-old Uber Technologies, an on-demand transportation service. Google Ventures, the venture capital arm of the tech giant, and private equity firm TPG Capital have since joined him; after their $258 million investment last summer, San Francisco–based Uber was valued at $3.5 billion.

Walsh thinks the line between sharing and traditional companies will blur as everyone from yacht makers to hotel chains partner with or acquire peer-to-peer rental services like Airbnb and Boatbound. “There are probably only a handful that are billion-dollar companies, but I think there are going to be many more,” he says. Investors like such businesses because they’re scalable, with no product to warehouse, explains Jeremiah Owyang, founder of San Francisco–based consulting firm Crowd Companies. Conservative institutions will embrace their IPOs just as they did Facebook’s in 2012, Owyang predicts: “We will see the same exact thing occur as these companies get ready for a material event, but that’s not going to be for three or four years.” • •