Green Ride
#Financial Services
#Social Impact Investing
Practice this advanced merger & acquisition case interview question in the Financial Services sector. Includes detailed problem prompt, clarifying questions, structured framework, and expert recommendation. Part of ProHub's 835+ consulting case library.
ProHub Comment
This case tests the candidate's ability to balance dual objectives—financial returns and social impact—requiring both quantitative valuation skills (DCF analysis) and qualitative impact assessment (CO2 emissions analysis). The critical insight is recognizing that PickUp's growth would actually increase carbon emissions by shifting ridership from public transit to ridesharing, creating a misalignment with the fund's core mission despite strong financial returns.
Estimated Time
35 minutes
Difficulty
Hard
Source
Duke
10
/ 100
Your client, Clean Ventures (CV), is an impact investment fund that focuses on technologies with the potential to improve the environment or reduce humanity’s carbon footprint. CV has been approached by PickUp, a ride hailing app, regarding a potential investment. Management would like your help determining whether PickUp is a worthwhile investment for CV.
Clarifying Information
- Your client expects for there to be a liquidity event in 2022
- In 2022, the overall market for ridesharing will be $15b
- Your client believes Pickup will command a 20% market share
- The profit margin for rideshare firms is 30%
- Valuation multiples are expected to be 8x
- The firm is being offered a 5% stake for $200M
- 10 miles per person per day commute
- Cars – 25 lbs of CO2 per mile
- Bikes – 0lbs of CO2 per mile
- Public Transport – 2lbs of CO2 per mile
- Car Share – 2 passengers per car average