Another month, another billion for Uber… The ride-hailing business is reportedly raising yet again — planning to raise close to $1 billion in new investment according to the NYT citing “people close to the matter”, with investors looking at a valuation of between $60 billion and $70 billion for the six-year-old startup.
If the NYT’s report is on the money, it comes mere months after the WSJ reported Uber had raised almost $1 billion in new financing, with a valuation then, in July, of more than $50 billion.
We’ve reached out to Uber for comment and will update this story with any response. Update: An Uber spokesman declined to comment.
Uber’s war-chest runs to more than $8 billion in confirmed financing rounds at this stage.
Why does a ride-hailing business that likes to claim it’s not a transportation company need such a massive money mountain behind it? It’s pretty clear Uber subsidizes the cost of rides as part of its market expansion acceleration strategy — as a way to undercut traditional taxi opposition and put pressure on local ride-hailing competition.
It’s also been spending big on trying to crack specific international markets, such as the Chinese market, where it faces some fast growing (and well funded) local competition — raising around $1.2 billion last month to fuel its growth there, and another $1 billion in July focused on India.
The company has also signaled its ambitions go beyond getting people from A to B, with merchant delivery programs, such as food delivery (Uber Eats) and a same-day courier service (Uber Rush), being piloted and soft launched in various cities.
It’s also engaged in driverless car tech research — envisaging an evolution of its platform, down the road, where Ubers are driven by robots rather than self-employed human ‘partners’. The meatsacks will just be sitting in the back.
The accelerating stack of investment rounds and valuations is a measure of the scale of Uber’s ambitions to become a global on-demand logistics platform business — a vision that’s clearly convinced investors. (Albeit, it gets easier to be convinced when you’re taking a punt on an $8 billion investment stack.)
That said, the company continues to face various problems on the regulatory front in multiple markets, clashing with more heavily regulated taxi industries, for instance. And it has drawn fire for its attitude to user data and privacy. So spending on lobbying and lawyers is another Uber cost centre for investor cash.