JOIN USNot to be left behind in the race to enhance its market penetration, global taxi-aggregator player Uber Technologies has increased its war chest by moving close to raising $2.1 billion for a total valuation of $62.5 billion, unprecedented in the history of any startups.
The new Series G round would take Uber’s total funding till date to an unprecedented $9.91 billion. According to sources from Uber, the new round of funds will be used to strengthen its position in Asia, especially in India and China. It will also help the company to branch into other services beyond picking up and dropping off riders.
According to a report in The New York Times, the new round was led by investment firms Tiger Global Management and T Rowe Price. The taxi aggregator is also looking at investment from strategic investors with shared business interests globally, Uber sources said. The company was seed funded in 2009.
To withstand competition from Uber, its three Asian competitors — Didi Kuaidi, Ola and GrabTaxi — along with US-based Lyft, had on Friday declared their decision to build a new platform so that the they can make their apps compatible with each other.
Competition is tough
The interesting part of the new investment is that Uber received the money from Tiger Global, which is also backing its competitors, India’s Ola and Singapore’s GrabTaxi, The New York Times pointed out.
Analysts closely watching these developments suspect that there will be further mergers in certain geographies. There will be also cross-currents and opposition from existing investors in these companies, like Tencent, an investor in Didi Kuaidi, which was accused by Uber of deleting its accounts in the ubiquitous Chinese mobile chat app WeChat. The chat app is considered an easy way to communicate with drivers and riders in China. Didi Kuaidi coupons are available for WeChat.
Interacting with Deccan Herald, Grant Thornton India Partner Vikram Bapat said the rising valuation of eCommerce and platform companies are because of the perceptional value that investors find in these companies. “Investors find true potential in these companies because of their business model and believe that demand for their service will enhance day by day. The valuation of these companies will grow as there is anticipation based on demand estimation that investments will bring more returns,” he said.
Bapat pointed out that even though these eCommerce and platform players are reeling under debt and not even achieving breakeven, investors are pouring in money as their business model will reap rich dividends since can be deployed across geographies in a short span of time.
A leading early stage investor, who didn’t wanted to named, said Uber has established its dominance around the globe and proved its ability to generate profit.